No. 1-1183
                                
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                            FORM 10-K
                          ANNUAL REPORT
  Pursuant to Section 13 of the Securities Exchange Act of 1934
           For the Fiscal Year Ended December 31, 1994
                                
                          PepsiCo, Inc.
                 Incorporated in North Carolina
                 Purchase, New York  10577-1444
                         (914) 253-2000
                                
                           13-1584302
              (I.R.S. Employer Identification No.)
                    _________________________
Securities registered pursuant to Section 12(b) of the Securities
                      Exchange Act of 1934:
                                
                                        
Title of Each                           Name of Each Exchange
Class                                   on Which Registered
________________                        _____________________

Capital Stock, par value 1-2/3 cents  New York and Chicago Stock
per share                             Exchanges
7-5/8% Notes due 1998                 New York Stock Exchange
                                
     Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days.   Yes  /X/       No

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   /   /

     The aggregate market value of PepsiCo Capital Stock held by
nonaffiliates of PepsiCo as of March 10, 1995 was
$31,315,121,153.

     The  number  of  shares  of  PepsiCo  Capital  Stock
outstanding  as  of  March 10, 1995 was 787,801,790.

Documents of Which Portions         Parts of Form 10-K into
Are Incorporated by Reference      Which Portion of Documents
_____________________________      __________________________

Proxy Statement for PepsiCo's 
May 3, 1995                                 
Annual Meeting of Shareholders               III

 1
                                
                             PART I
Item 1.   Business

      PepsiCo, Inc. (the "Company") was incorporated in  Delaware
in 1919 and was reincorporated in North Carolina in 1986.  Unless
the  context  indicates  otherwise, when  used  herein  the  term
"PepsiCo"  shall mean the Company and its various  divisions  and
subsidiaries.  PepsiCo is engaged in the following  domestic  and
international   businesses:    beverages,   snack    foods    and
restaurants.

Beverages

      PepsiCo's  beverage business consists of  Pepsi-Cola  North
America ("PCNA") and Pepsi-Cola International ("PCI").

     PCNA manufactures and sells beverages, primarily soft drinks
and  soft  drink concentrates, in the United States  and  Canada.
PCNA  sells its concentrates to licensed independent and company-
owned  bottlers ("Pepsi-Cola bottlers") and to joint ventures  in
which  PepsiCo  participates.  Under appointments  from  PepsiCo,
bottlers   manufacture,  sell  and  distribute,  within   defined
territories, carbonated soft drinks and syrups bearing trademarks
owned by PepsiCo, including PEPSI-COLA, DIET PEPSI, MOUNTAIN DEW,
SLICE,  MUG  and, within Canada, 7UP and DIET 7UP (the  foregoing
are  sometimes  referred  to  as  "Pepsi-Cola  beverages").   The
Pepsi/Lipton Tea Partnership, a joint venture of PCNA and  Thomas
J.  Lipton  Co., develops and sells tea concentrate to Pepsi-Cola
bottlers  and  develops and markets ready-to-drink  tea  products
under  the  LIPTON trademark.  Such products are  distributed  by
Pepsi-Cola  bottlers  throughout  the  United  States.   A  joint
venture  between PCNA and Ocean Spray Cranberries, Inc.  develops
new juice products under the OCEAN SPRAY trademark.  Pursuant  to
a separate distribution agreement, Pepsi-Cola bottlers distribute
single-serve  sizes of OCEAN SPRAY juice products throughout  the
United States.

      Pepsi-Cola beverages are manufactured in approximately  200
plants  located  throughout the United States and  Canada.   PCNA
operates  approximately  65 plants and  manufactures,  sells  and
distributes  beverages  throughout  approximately  160   licensed
territories,  accounting for approximately 56% of the  Pepsi-Cola
beverages  sold  in the United States and Canada.   Approximately
135  plants  are  operated  by  independent  licensees  or  joint
ventures in which PCNA participates, which manufacture, sell  and
distribute approximately 44% of the Pepsi-Cola beverages sold  in
the United States and Canada.  PCNA has a minority interest in  6
of   these   licensees,  comprising  approximately  70   licensed
territories.

      PCI  manufactures  and  sells soft drinks  and  soft  drink
concentrates outside the United States and Canada.  PCI sells its
concentrates  to  Pepsi-Cola bottlers and to  joint  ventures  in
which  PepsiCo  participates.  Under appointments  from  PepsiCo,
bottlers   manufacture,  sell  and  distribute,  within   defined
territories, Pepsi-Cola beverages bearing PEPSI-COLA, DIET PEPSI,
MIRINDA,  PEPSI  MAX, 7UP, DIET 7UP and other trademarks.   There
are approximately 530 plants outside the United States and Canada
bottling   PepsiCo's  beverage  products.   These  products   are
available  in  195 foreign countries and territories.   Principal
international  markets include Mexico, Saudi  Arabia,  Argentina,
Spain, the United Kingdom, Thailand, Venezuela, Brazil and China.

      PCNA  and  PCI  make programs available to assist  licensed
bottlers in servicing markets, expanding operations and improving
production  methods  and facilities.  PCNA  and  PCI  also  offer
assistance  to  bottlers  in  the distribution,  advertising  and
marketing  of  their products and offer sales assistance  through
special  merchandising and promotional programs and  by  training
bottler  personnel.   PCNA  and PCI  maintain  control  over  the
composition   and  quality  of  beverages  sold   under   PepsiCo
trademarks.

 2

Snack Foods

      PepsiCo's  snack food business consists of Frito-Lay  North
America ("Frito-Lay") and PepsiCo Foods International ("PFI").

      Frito-Lay  manufactures and sells a varied  line  of  snack
foods  throughout the United States and Canada, including  FRITOS
brand  corn chips, LAY'S (in the United States) and RUFFLES brand
potato  chips,   DORITOS  and  TOSTITOS  brands  tortilla  chips,
CHEE.TOS  brand cheese flavored snacks, ROLD GOLD brand  pretzels,
SMARTFOOD  brand  cheese  flavored  popcorn  and  SUNCHIPS  brand
multigrain snacks.

      Frito-Lay's products are transported from its manufacturing
plants to major distribution centers throughout the United States
and  Canada,  principally  by  company-owned  trucks.   Frito-Lay
utilizes  a  "store-door-delivery"  system,  whereby  its  14,600
person  sales  force delivers the snacks directly  to  the  store
shelf.   This  system  permits Frito-Lay  to  work  closely  with
approximately  466,000 retail trade customers weekly  and  to  be
responsive  to  their  needs.  Frito-Lay believes  this  form  of
distribution  is a valuable marketing tool and is  essential  for
the proper distribution of products with a short shelf life.

      PFI manufactures and markets snack foods outside the United
States  and  Canada  through company-owned facilities  and  joint
ventures.   On  most of the European continent,  PepsiCo's  snack
food  business consists of Snack Ventures Europe, a joint venture
between PepsiCo and General Mills, Inc., in which PepsiCo owns  a
60%  interest.   Many  of  PFI's snack  food  products,  such  as
SABRITAS  brand potato chips in Mexico, are similar in  taste  to
Frito-Lay snacks sold in the United States and Canada.  PFI  also
sells  a  variety  of snack food products which appeal  to  local
tastes  including, for example WALKERS CRISPS, which are sold  in
the  United  Kingdom,  and GAMESA cookies and  SONRIC'S  candies,
which  are  sold  in  Mexico.   In  addition,  RUFFLES,  CHEE.TOS,
DORITOS,  FRITOS  and  SUNCHIPS  brand  snack  foods  have   been
introduced  to  international markets.   Principal  international
markets  include  Mexico,  the  United  Kingdom,  Spain,  Brazil,
Poland, the Netherlands, France, and Australia.

Restaurants

     PepsiCo's worldwide restaurant business principally consists
of Pizza Hut, Inc. ("Pizza Hut"),  Taco Bell Corp. ("Taco Bell"),
KFC  Corporation  ("KFC")  and PepsiCo Restaurants  International
("PRI").

       Pizza   Hut  is  engaged  principally  in  the  operation,
development  and franchising of a system of casual  full  service
family  restaurants, delivery/carryout units and kiosks operating
under  the  name  PIZZA HUT.  The full service restaurants  serve
several  varieties  of  pizza  as  well  as  pasta,  salads   and
sandwiches.   Pizza Hut (through its subsidiaries and affiliates)
operates    approximately    5,100   PIZZA    HUT    restaurants,
delivery/carryout  units and other outlets in the  United  States
and   approximately   240   in   Canada.    Franchisees   operate
approximately    2,650    additional    domestic     restaurants,
delivery/carryout  units and other outlets in the  United  States
and  225  in Canada.  Licensees operate approximately  650  kiosk
outlets  in the United States.  These restaurants and  units  are
located in all 50 states and throughout Canada.

       Taco   Bell  is  engaged  principally  in  the  operation,
development   and   franchising  of  a  system  of   fast-service
restaurants  serving  carryout  and  dine-in  moderately   priced
Mexican-style  food, including tacos, burritos, taco  salads  and
nachos  and  operating  under the  name  TACO  BELL.   Taco  Bell
(through  its subsidiaries and affiliates) operates approximately
3,200  TACO  BELL outlets in the United States and 70 in  Canada.
Franchisees operate approximately 1,500 additional restaurants in
the  United States.  Licensees operate approximately 930  special
concept outlets in the United States and 30 in Canada.

     KFC is engaged principally in the operation, development and
franchising  of  a  system  of carryout and  dine-in  restaurants
featuring  chicken and operating under the names  KENTUCKY  FRIED
CHICKEN  and/or  KFC.   KFC  (through  its  subsidiaries   and/or
affiliates)  operates  approximately  2,000  restaurants  in  the
United   States   and   250  in  Canada.    Franchisees   operate
approximately  3,000 additional restaurants in the United  States
and  600  in Canada.  Licensees operate approximately 100 outlets
in  the  United States.  KFC restaurants are located in 48 states
and throughout Canada.

 3

      PRI is engaged principally in the operation and development
of casual dining and fast-service restaurants, delivery units and
kiosks  which  sell PIZZA HUT, KFC and, to a lesser extent,  TACO
BELL products outside the United States and Canada.  PRI operates
approximately 800 PIZZA HUT restaurants, delivery/carryout  units
and  kiosks, franchisees operate approximately 1,200 units,  and
joint  ventures  in which PRI participates operate  approximately
460  units.  PIZZA HUT units are located in a total of 83 foreign
countries  and  territories (exclusive of Canada), and  principal
markets  include  Australia, the United Kingdom,  Spain,  Brazil,
Mexico and South Korea.  PRI also operates approximately 850  KFC
restaurants  and kiosks, franchisees operate approximately  2,150
restaurants  and  kiosks,  and  joint  ventures  in   which   PRI
participates  operate approximately 400 restaurants  and  kiosks.
KFC  units  are  located in 71 foreign countries and  territories
(exclusive  of  Canada),  and principal  markets  include  Japan,
Australia, the United Kingdom, South Africa, Mexico and Malaysia.
PRI  also  operates  approximately  20  TACO  BELL  outlets,  and
franchisees  operate approximately 35 outlets, in a total  of  15
foreign countries and territories (exclusive of Canada).

      PepsiCo  also owns, operates, or participates  as  a  joint
venturer  in a number of other restaurant concepts in the  United
States.   Pizza Hut operates approximately 150 D'ANGELO  SANDWICH
SHOPS, and franchisees operate approximately 50 additional units.
Pizza Hut or franchisees also operate approximately 25 EAST  SIDE
MARIO'S restaurants.  Taco Bell operates approximately 135 HOT 'N
NOW  units, and franchisees operate approximately 40 units.  Taco
Bell  also  operates approximately 50 CHEVYS Mexican restaurants.
PepsiCo   participates   in  a  joint  venture   which   operates
approximately 70 CALIFORNIA PIZZA KITCHEN restaurants.

      PFS,  a division of PepsiCo, is engaged in the distribution
of  food,  supplies and equipment to company-owned,  franchised and
licensed PIZZA HUT, TACO BELL and KFC restaurants in the United States,
Australia, Canada, Mexico, Puerto Rico and Poland.

Competition

       All   of  PepsiCo's  businesses  are  highly  competitive.
PepsiCo's  beverages  and  snack foods compete  domestically  and
internationally with widely distributed products of a  number  of
major  companies  that have plants in many of the  areas  PepsiCo
serves, as well as with private label soft drinks and snack foods
and  with  the  products  of  local and  regional  manufacturers.
PepsiCo's  restaurants compete domestically  and  internationally
with  other restaurants, restaurant chains, food outlets and home
delivery    operations.     PFS   competes    domestically    and
internationally with other food distribution companies.  For  all
of PepsiCo's industry segments, the main areas of competition are
price, quality and variety of products, and customer service.

Employees

      At December 31, 1994, PepsiCo employed, subject to seasonal
variations, approximately 471,000 persons (including 282,000 part-
time employees), of whom approximately 340,000 (including 228,000
part-time  employees)  were employed within  the  United  States.
PepsiCo  believes that its relations with employees are generally
good.

Raw Materials and Other Supplies

      The  principal materials used by PepsiCo in  its  beverage,
snack  food and restaurant businesses are corn sweeteners, sugar,
aspartame,  flavorings, vegetable and essential  oils,  potatoes,
corn,  flour,  tomato  products, pinto  beans,  lettuce,  cheese,
butter, beef, pork and chicken products, seasonings and packaging
materials.  Since PepsiCo relies on trucks to move and distribute
many  of  its  products,  fuel is also  an  important  commodity.
PepsiCo  employs specialists to secure adequate supplies of  many
of these items and has not experienced any significant continuous
shortages.  Prices paid by PepsiCo for such items are subject  to
fluctuation.  When prices increase, PepsiCo may or may  not  pass
on  such increases to its customers.  Generally, when PepsiCo has
decided   to  pass  along  price  increases,  it  has   done   so
successfully.  There is no assurance that PepsiCo will be able to
do so in the future.

Governmental Regulations

      The  conduct  of PepsiCo's businesses, and the  production,
distribution  and  use of many of its products,  are  subject  to
various  federal laws, such as the Food, Drug and  Cosmetic  Act,
the  Occupational  Safety and Health Act 

 4

and the  Americans  with Disabilities  Act.  The conduct of PepsiCo's 
businesses  is  also subject to local, state and foreign laws.


Patents, Trademarks, Licenses and Franchises

       PepsiCo  owns  numerous  valuable  trademarks  which   are
essential  to  PepsiCo's worldwide businesses,  including  PEPSI-
COLA, PEPSI, DIET PEPSI, PEPSI MAX, MOUNTAIN DEW, SLICE, MUG, 7UP
and  DIET  7UP  (outside the United States), MIRINDA,  FRITO-LAY,
DORITOS,  RUFFLES,  LAY'S, FRITOS, CHEE.TOS,  SANTITAS,  SUNCHIPS,
TOSTITOS,  ROLD  GOLD, GRANDMA'S, SMARTFOOD,  SABRITAS,  WALKERS,
PIZZA HUT, TACO BELL, KENTUCKY FRIED CHICKEN and KFC.  Trademarks
remain valid so long as they are used properly for identification
purposes,  and PepsiCo emphasizes correct use of its  trademarks.
PepsiCo   has   authorized   (through  licensing   or   franchise
arrangements) the use of some of its trademarks in such  contexts
as  Pepsi-Cola  bottling appointments, snack food joint  ventures
and  wholly licensed operations and Pizza Hut, Taco Bell and  KFC
franchise agreements.  In addition, PepsiCo licenses the  use  of
its trademarks on collateral products for the primary purpose  of
enhancing brand awareness.

      PepsiCo  either  owns or has licenses to use  a  number  of
patents which relate to certain of its products and the processes
for  their production and to the design and operation of  various
equipment  used  in  its businesses.  Some of these  patents  are
licensed to others.

Research and Development

      PepsiCo spent approximately $152 million, $113 million  and
$102  million on research and development activities  during  the
years 1994, 1993 and 1992, respectively.

Environmental Matters

      PepsiCo  continues to make expenditures in order to  comply
with  federal,  state, local and foreign environmental  laws  and
regulations,  which  expenditures have  not  been  material  with
respect   to  PepsiCo's  capital  expenditures,  net  income   or
competitive position.

Business Segments

       Information  as  to  net  sales,  operating  profits   and
identifiable  assets  for  each of PepsiCo's  industry  segments,
restaurant  chains and major geographic areas of  operations,  as
well  as  capital  spending,  acquisitions  and  investments   in
affiliates,  amortization of intangible assets  and  depreciation
expense for each industry segment and restaurant chain, for 1994,
1993  and  1992 is contained in Item 8 "Financial Statements  and
Supplementary Data" in Note 2 on page F-9.

Item 2.   Properties

Beverages

      PepsiCo  operates approximately 105 plants  throughout  the
world in which beverage concentrates and syrups are manufactured,
or  beverages are bottled, or both, of which approximately 95 are
owned  and  10  are  leased.   Joint ventures  in  which  PepsiCo
participates  operate  approximately 85 plants  and  distribution
operations.   In  addition,  PepsiCo operates  approximately  370
warehouses  or  offices for its beverage business in  the  United
States  and  Canada, of which approximately  285  are  owned  and
approximately 85 are leased.

      The concentrate or syrup manufacturing facilities owned  by
PepsiCo  are located in Argentina, Canada, China, India, Ireland,
Japan,  Mexico, Pakistan, the Philippines, Puerto Rico, Thailand,
Turkey,  the United States, Uruguay and Venezuela.  PepsiCo  owns
bottling  plants in Canada, the Czech Republic, Germany,  Greece,
Hungary,  India, Japan, Mexico, Spain and the United  States  and
leases  bottling  plants  in  the United  States.   Company-owned
distribution  operations  are  located  in  the  Czech  Republic,
France, Hungary, Poland, Russia and Slovakia.  Joint 

 5

ventures  in which  PepsiCo participates operate plants located in  
Argentina, Australia,   The  Bahamas,  Brazil,  Chile,  China,  Hong   
Kong, Indonesia, Japan, Kampuchea, Mexico, Myanmar, Nepal, New Zealand,
the   Philippines,  Poland,  Russia,  Slovenia,   South   Africa,
Thailand, the United Kingdom, Uruguay and Vietnam.

      PepsiCo owns a research and technical facility in Valhalla,
New  York,  for its beverage businesses.  PepsiCo also  owns  the
headquarters facilities for its beverage and international  snack
food, businesses in Somers, New York.

Snack Foods

      Frito-Lay  operates  43 food manufacturing  and  processing
plants in the United States and Canada, of which 41 are owned and
2 are leased.  PepsiCo also operates plants located in Argentina,
Australia, Brazil, Chile, China, the Dominican Republic, Ecuador,
Estonia,  India, Japan, Mexico, Poland, Puerto Rico, Turkey,  the
United  Kingdom,  Uruguay and Venezuela while joint  ventures  in
which  PepsiCo  participates operate plants located  in  Belgium,
China,  Cyprus, Egypt, France, Greece, Indonesia,  Italy,  Korea,
the  Netherlands, Poland, Portugal, Spain, Taiwan  and  Thailand.
In  addition,  Frito-Lay owns approximately  185  warehouses  and
distribution  centers and leases approximately 30 warehouses  and
distribution centers for storage of food products in  the  United
States  and  Canada.  Approximately 1,600 smaller warehouses  and
storage  spaces located throughout the United States  and  Canada
are  leased  or owned.  Frito-Lay owns its headquarters  building
and  a  research facility in Plano, Texas.  Frito-Lay also leases
offices  in  Dallas,  Texas  and leases  or  owns  sales/regional
offices throughout the United States.

Restaurants

      Through  Pizza  Hut, Taco Bell, KFC and PRI,  PepsiCo  owns
approximately 3,800 and leases approximately  6,700  restaurants,
delivery/carryout units and other outlets in the  United  States,
and  owns or leases approximately 2,220 additional units  outside
the  United States.  Joint ventures in which PepsiCo participates
operate approximately 860 units outside the United States.  Pizza
Hut owns manufacturing facilities in Wichita, Kansas and owns its
corporate  headquarters  and  leases  certain  additions  to  the
building  in  Wichita,  Kansas.  Taco Bell leases  its  corporate
headquarters  and  certain additions to the building  in  Irvine,
California.   KFC  owns  a research facility  and  its  corporate
headquarters building in Louisville, Kentucky.  PFS  owns  1  and
leases  22  distribution centers, 2 manufacturing  plants  and  4
offices  in  the  United  States.   PFS  owns  1  and  leases   4
distribution centers outside of the United States.

General

      The  Company  owns its corporate headquarters buildings  in
Purchase, New York.

     With a few exceptions, leases of plants in the United States
and Canada are on a long-term basis, expiring at various times to
the  year  2088,  with  options to renew for additional  periods.
Most  international  plants are leased for  varying  and  usually
shorter  periods,  with or without renewal options.   PIZZA  HUT,
TACO  BELL  and KFC restaurants which are not owned are generally
leased  for  initial terms of 15 or 20 years, and generally  have
renewal   options,   while  PIZZA  HUT  delivery/carryout   units
generally are leased for significantly shorter initial terms with
shorter renewal options.

      The  Company believes that its properties and those of  its
subsidiaries  and divisions are in good operating  condition  and
are suitable for the purposes for which they are being used.

Item 3.   Legal Proceedings

      PepsiCo  is  subject  to various claims  and  contingencies
related  to  lawsuits,  taxes, environmental  and  other  matters
arising  out  of  the  normal  course  of  business.   Management
believes  that  the  ultimate liability, if  any,  in  excess  of
amounts   already   provided  arising   from   such   claims   or
contingencies is not likely to have a material adverse effect  on
PepsiCo's annual results of operations or financial condition.

Item 4.   Submission of Matters to a Vote of Stockholders

     Not applicable.

 6


                             PART II

Item 5.   Market for Registrant's Common Equity and Related
Stockholder Matters

     Stock Trading Symbol - PEP

     Stock Exchange Listings - The New York Stock Exchange is the
principal market for PepsiCo Capital Stock, which is also  listed
on  the Chicago, Basel, Geneva, Zurich, Amsterdam and Tokyo Stock
Exchanges.

      Shareholders  - At year-end 1994, there were  approximately
168,000 shareholders of record.

      Dividend  Policy  -   Quarterly cash dividends  are  usually
declared  in  November,  February,  May  and  July  and  paid  at  the
beginning  of  January  and  the  end  of  March,  June and  September.
The dividend record dates for 1995 will be March 10, June 9, September 8
and December 8.  Quarterly cash dividends  have been paid since PepsiCo 
was  formed in 1965, and dividends per share have increased for 22 
consecutive years.

       Consistent  with  PepsiCo's  current  payout   target   of
approximately one-third of the prior year's income  from  ongoing
operations, the 1994 dividends declared represented 34%  of  1993
income from ongoing operations.


     Dividends Declared Per Share (in cents)

Quarter        1994      1993
  1            16        13
  2            18        16
  3            18        16
  4            18        16
Total          70        61

      Stock Prices - The high, low and closing prices for a share
of  PepsiCo  Capital  Stock on the New York  Stock  Exchange,  as
reported by The Dow Jones News/Retrieval Service, for each fiscal
quarter of 1994 and 1993 were as follows (in dollars):

1994             High      Low       Close
Fourth Quarter   37 3/8    32 1/4    36 1/4
Third Quarter    34 5/8    29 1/4    33 3/4
Second Quarter   37 5/8    29 7/8    31 1/8
First Quarter    42 1/2    35 3/4    37 5/8

1993             High      Low       Close
Fourth Quarter   42 1/8    37 5/8    41 7/8
Third Quarter    40 1/8    34 5/8    39
Second Quarter   43 5/8    34 1/2    36 1/2
First Quarter    43 3/8    38 1/2    42

Item 6.  Selected Financial Data

Included on pages F-42 through F-48.


 7

Item 7.     Management's Discussion and Analysis of Financial
Condition and Results of Operations

Management's Analysis - Overview

     To enhance understanding of PepsiCo's financial performance,
the  various  components of Management's Analysis  are  presented
near   the  pertinent  financial  statements.   Accordingly,   in
addition  to this overview, separate analyses of the  results  of
operations,  financial condition and cash flows appear  on  pages
11, 12 and 14. respectively.  Also, the analysis of each industry
segment's  net sales and operating profit performance  begins  on
pages  15, 19 and 22.

     Marketplace Actions

          PepsiCo's domestic and international businesses operate
in  markets that are highly competitive and subject to global and
local  economic  conditions including inflation, commodity  price
and  currency fluctuations and governmental actions.  In  Mexico,
for  example,  our businesses have benefited in past  years  from
improving conditions.  Conversely, the significant devaluation of
the Mexican peso at the end of 1994 and continuing into 1995 will
not  only negatively impact reported earnings from Mexico due  to
translation,  but  is  expected to create a much  less  favorable
economic  climate in the country.  Other examples  include  risks
associated   with   political   instability   and   its   related
dislocations  in  countries where PepsiCo operates  and  possible
employee  benefit or minimum wage legislation  in  the  U.S.  and
elsewhere,   increasing  the  cost  of  providing  benefits   and
compensation  to  employees.  PepsiCo's operating  and  investing
strategies  are  designed,  where  possible,  to  mitigate  these
factors  through aggressive actions on several fronts  including:
(a)  enhancing the appeal and value of its products through brand
promotion,  product innovation, quality improvement  and  prudent
pricing  actions; (b) providing better service to customers;  (c)
increasing worldwide availability of its products; (d)  acquiring
businesses and forming alliances to increase market presence  and
utilize  resources  more efficiently; and  (e)  containing  costs
through   efficient  and  effective  purchasing,   manufacturing,
distribution and administrative processes.

     Restructurings

            Restructuring  actions  realign  resources  for  more
efficient and effective execution of operating strategies.  As  a
result,  PepsiCo continually considers and executes restructuring
actions  that vary in size and impact, for example, from a  minor
sales  force  reorganization at a local facility to a significant
organizational and process redesign affecting an entire operating
division.   The resulting cost savings or profits from  increased
sales  are  reinvested  in  the business  to  increase  PepsiCo's
shareholder value.  Major restructuring actions announced in 1992
and  now  underway or completed in the beverage and international
snack  food segments resulted in charges totaling $193.5  million
($128.5  million after-tax or $0.16 per share).  In  1994,  $28.3
million ($17.4 million after-tax or $0.02 per share) of the  1992
restructuring  accruals  were  reversed  into  income,  primarily
reflecting refinements of the original domestic beverage  accrual
estimate  and  management's decision to reduce the scope  of  the
domestic  beverage  restructuring.  The majority  of  the  amount
reversed into income was offset by additional charges in 1994 for
new  actions.   The remaining accruals for the 1992 restructuring
actions  of  $39  million outstanding at year-end 1994  represent
expected cash payments of which $25 million, $11 million  and  $3
million  are  expected  to  be  paid  in  1995,  1996  and  1997,
respectively.

            Annual  cost  savings  from  the  1992  restructuring
actions, when fully implemented, are expected to be approximately
$75  million primarily from reduced employee and facility  costs.
In  addition,  while difficult to measure, the domestic  beverage
segment  is also expected to benefit by an estimated $90  million
annually   from  centralization  of  purchasing  activities   and
incremental    volume   and   pricing   from   improvements    in
administrative  and  business  processes.   The  combined   gross
benefits realized in 1994 from the 1992 restructuring actions are
estimated  to  be approximately $50 million.  These benefits  are
expected to increase annually until fully realized in 1998.   See
Notes  2  and  16  for  additional detail  related  to  the  1992
restructuring charges.  See Management's Analysis of beverage and
snack  food performance on pages 15 and 19, respectively,  for  a
discussion   of  the  1992  restructuring  charges  and   related
anticipated benefits.


 8

     Derivatives

          PepsiCo uses derivative instruments primarily to reduce
borrowing   costs   and   hedge  future  purchases   of   certain
commodities.    PepsiCo's  policy  is  to  not   use   derivative
instruments for speculative purposes and has procedures in  place
to  monitor and control their use.  PepsiCo's credit risk related
to  derivatives is considered low.  Financing-related  derivative
contracts   are  only  entered  into  with  strong   creditworthy
counterparties  and are generally of relatively  short  duration.
Purchases  of  commodities  are  hedged  with  commodity  futures
contracts traded on national exchanges.

           Reduce  Borrowing Costs:  PepsiCo enters into interest
rate  and  foreign  currency  swaps  to  effectively  change  the
interest  rate and currency of specific debt issuances  with  the
objective of reducing borrowing costs.  These swaps are generally
entered into concurrently with the issuance of the debt they  are
intended  to  modify.  The notional value, payment  and  maturity
dates  of  the swaps match the principal, interest payment  dates
and  maturity dates of the related debt.  Accordingly, any market
impact (risk or opportunity) associated with these swaps is fully
offset  by  the opposite market impact on the related debt.   See
Notes 9 and 10 for additional details regarding interest rate and
currency swaps.

          Hedge Commodity Costs:  PepsiCo hedges future commodity
purchases when we believe it will result in lower net costs.  The
futures  contracts entered into do not exceed expected usage  nor
do  they generally extend beyond one year.  While PepsiCo expects
to  generate  lower commodity costs over time  by  entering  into
these  futures contracts, it is possible that the commodity costs
will  be higher than if futures contracts were not entered  into.
we  believe it has the ability to raise prices if commodity
prices  increase;  however, it expects  to  do  so  only  if  the
increase  is other than temporary and it would not place  PepsiCo
at  a  competitive disadvantage.  Open contracts at year-end 1994
and  gains  and losses realized in 1994 or deferred  at  year-end
were not significant.

     Currency Exchange Effects

           In  1994,  1993  and  1992,  international  businesses
represented  18.6%, 18.0% and 17.7%, respectively,  of  PepsiCo's
total  segment  operating  profits.  Operating  in  international
markets   sometimes  involves  volatile  movements  in   currency
exchange  rates.  The economic impact of currency  exchange  rate
movements  on PepsiCo is complex because such changes  are  often
linked  to variability in real growth, inflation, interest rates,
governmental  actions  and  other factors.   In  addition,  these
changes,  if material, can cause PepsiCo to adjust its  financing
and  operating  strategies, for example, pricing,  promotion  and
product  strategies  and  decisions concerning  sourcing  of  raw
materials and packaging.  Because PepsiCo operates in  a  mix  of
businesses  and numerous countries, management believes  currency
exposures  are  fairly  well diversified.   Moreover,  management
believes that currency exposures are not a significant factor  in
competition   at   the  local  market  operating   level.    When
economically  appropriate, however, PepsiCo enters  into  foreign
currency  hedges  to  minimize  specific  cash  flow  transaction
exposures.   The  following paragraphs describe  the  effects  of
currency  exchange rate movements on PepsiCo's reported  results.
See Other Factors Expected to Impact 1995 Results on page 10.

           As  currency exchange rates change, translation of the
income  statements of international businesses into U.S.  dollars
affects  year-over-year comparability of operating  results.   In
1994  and 1993, sales and operating profit growth rates  for  our
consolidated   international  businesses  were   not   materially
impacted  by  the  translation effects  of  changes  in  currency
exchange  rates.   The  effects on  comparability  of  sales  and
operating   profits  arising  from  translation  of  the   income
statements  of  international businesses  are  identified,  where
material, in Management's Analysis of segment operating  results.
These  translation effects exclude the impact  of  businesses  in
highly  inflationary countries, where the functional currency  is
the U.S. dollar.

           Changes  in  currency exchange rates  also  result  in
reported foreign exchange gains and losses which are included  as
a  component of unallocated expenses, net (see pages F-12 and  F-
13).   PepsiCo  reported  a net foreign  exchange  gain  of  $4.5
million in 1994 compared to net foreign exchange losses of  $41.2
million and $17.4 

 9

million in 1993 and 1992, respectively.   These reported  amounts  include 
translation gains and  losses  arising from  remeasurement into U.S. 
dollars of the net monetary  assets of  businesses  in  highly  
inflationary countries  as  well  as transaction gains and losses.  
Transaction gains and losses arise from   monetary   assets  such  as  
receivables  and short-term investments  as well as payables (including 
debt) denominated  in currencies other than a business unit's functional 
currency.   In implementing  strategies to minimize after-tax  financing  
costs, the  effects of expected currency exchange rate movements on debt
and  short-term  investments are considered  along  with  related
interest rates in measuring effective net financing costs.

           Beginning in 1993, Mexico was no longer categorized as
highly  inflationary.  PepsiCo did not calculate the net  foreign
exchange  gain or loss that would have been reported in 1993  had
businesses  in  Mexico been accounted for as highly inflationary;
however,  translation gains and losses for businesses  in  Mexico
were not a significant component of the above 1992 amount.

Certain Factors Affecting Comparability

     Accounting Changes

           PepsiCo's  financial statements  reflect  the  noncash
impact of accounting changes adopted in 1994 and 1992.  In  1994,
PepsiCo  was required to adopt Statement of Financial  Accounting
Standards  No.  112,  "Employers' Accounting  for  Postemployment
Benefits"  (SFAS  112).  The cumulative effect of  adopting  SFAS
112,  an  $84.6 million charge ($55.3 million after-tax or  $0.07
per  share),  principally represented estimated future  severance
costs  related to services provided by employees prior  to  1994.
As  compared to the previous accounting method, the current  year
impact  of  adopting SFAS 112 was immaterial  to  1994  operating
profits.  See Note 14 for additional details.

           Also  in 1994, PepsiCo adopted a preferred method  for
calculating  the  market-related value of  plan  assets  used  in
determining  the  return-on-asset  component  of  annual  pension
expense  and the cumulative net unrecognized gain or loss subject
to  amortization.  The cumulative effect of adopting this change,
which  related  to  years prior to 1994, was a benefit  of  $37.8
million  ($23.3  million  after-tax  or  $0.03  per  share).   As
compared  to  the previous accounting method, the change  reduced
1994 pension expense by $35.1 million ($21.6 million after-tax or
$0.03 per share).  See Note 13 for additional details.

           Effective the beginning of 1992, PepsiCo early adopted
Statements of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" (SFAS
106), and No. 109, "Accounting for Income Taxes" (SFAS 109).  The
cumulative  effect of adopting SFAS 106, a $575.3 million  charge
($356.7  million  after-tax  or  $0.44  per  share),  represented
estimated future retiree health benefit costs related to services
provided  by employees prior to 1992.   The cumulative effect  of
adopting SFAS 109, a $570.7 million tax charge ($0.71 per share),
primarily represented the recognition of additional deferred  tax
liabilities related to acquired identifiable intangible assets as
of  the  beginning of 1992.  See Notes 12 and 17  for  additional
details  regarding  the  adoption  of  SFAS  106  and  SFAS  109,
respectively.

     Other Factors

           Comparisons  of  1994  to  1993  are  affected  by  an
additional week of results in the 1994 reporting period.  Because
PepsiCo's  fiscal year ends on the last Saturday in  December,  a
fifty-third  week is added every 5 or 6 years.   The  fifty-third
week increased 1994 earnings by an estimated $54.0 million ($34.9
million  after-tax  or  $0.04 per share).   See  Items  Affecting
Comparability,  Fiscal  Year, on  page  F-9  for  the  impact  on
PepsiCo's business segments.

           PepsiCo  recorded a one-time, noncash  gain  of  $17.8
million  ($16.8  million after-tax or $0.02 per share)  resulting
from  a  public share offering by BAESA, a bottling joint venture
in South America.  See Note 4 for additional details.

 10

     Significant U.S. Tax Changes Affecting Historical and Future
Results

           U.S.  federal income tax legislation enacted in August
1993  included  a  provision for a 1% statutory income  tax  rate
increase  effective  for the full year.  As required  under  SFAS
109, the increase in the tax rate resulted in a noncash charge of
$29.9  million  ($0.04  per  share) for  the  adjustment  of  net
deferred tax liabilities as of the beginning of 1993.

           The 1993 tax legislation also included a provision  to
reduce  the  tax  credit  associated  with  beverage  concentrate
operations in Puerto Rico.  This change limited the tax credit on
income  earned  in Puerto Rico in the first year to  60%  of  the
amount allowed under the previous tax law, with the limit further
reduced  ratably  over  the following four  years  to  40%.   The
provision,  which  became effective for PepsiCo's  operations  on
December 1, 1994, had an immaterial impact on 1994 earnings.  Had
the provision become effective at the beginning of 1994, earnings
for the year would have been reduced by approximately $60 million
or  $0.07  per share.  Similarly, had the 40% credit  limit  been
effective  in  1994,  earnings would  have  been  reduced  by  an
additional  $30  million or $0.04 per share over the  60%  credit
limit.

          In 1994, the U.S. Department of the Treasury proposed a
change  to  a  current regulation (known as Q&A 12), which  would
further  reduce the tax incentives associated with  the  beverage
concentrate operations in Puerto Rico.  This proposal applies  to
PepsiCo's sales of concentrate from its operations in Puerto Rico
to  its  related bottlers in the U.S.  If it had been adopted  as
proposed  in  1994,  the change would have become  effective  for
PepsiCo  on  December 1, 1994 with an immaterial impact  on  1994
earnings.   However, had the 60% credit limit  (discussed  above)
and the currently proposed Q&A 12 been in effect at the beginning
of  1994,  earnings for the year would have been  reduced  by  an
estimated  $112 million or $0.14 per share.  Had the  40%  credit
limit and proposed Q&A 12 both been effective in 1994, the impact
would  have  reduced 1994 earnings for the year by an  additional
$30  million or $0.04 per share over the 60% credit  limit.   The
estimated impacts are subject to change depending upon the  final
provisions  of  Q&A  12,  if enacted.   PepsiCo  and  others  are
vigorously opposing the proposed change.

           PepsiCo's  full year 1995 tax rate is not expected  to
exceed  35%.  The expected tax rate reflects PepsiCo's forecasted
1995 mix of U.S. and generally lower taxed foreign earnings,  the
reduction  in  the  tax credit on income earned  in  Puerto  Rico
resulting  from  the 1993 U.S. tax legislation  and  the  assumed
enactment  in  1995  of Q&A 12, as currently proposed,  partially
offset  by  significant  adjustments reflecting  the  anticipated
resolution in 1995 of audit issues related to prior years.

           The  unfavorable effect of Q&A 12 will not be included
in  the  1995  effective  tax rate unless  it  is  enacted.   The
benefits due to the adjustments will be included in the 1995  tax
rate  when  the  audit issues related to prior  years  have  been
resolved.   Accordingly, the potential exists for  volatility  in
PepsiCo's  1995  quarterly effective tax rates depending  on  the
timing of these events, as well as other factors.

Other Factors Expected to Impact 1995 Results

      In  late  1994  and early 1995, the Mexican  peso  devalued
significantly relative to the U.S. dollar.  The primary impact of
the  devaluation on 1994 financial results was an estimated  $275
million unfavorable change in the currency translation adjustment
account  in  Shareholders' Equity, representing the reduced  book
value  of  PepsiCo's Mexican peso-denominated  net  assets.   The
impact  on 1994 earnings was immaterial.  Quantifying the adverse
impact  of  the devaluation on 1995 operating results,  financial
condition and cash flows is difficult because, in addition to the
translation impact, the devaluation is likely to result  in  many
changes to the business environment including government actions,
accelerated inflation and its impact on prices and costs, reduced
consumer  demand and the impact of higher interest rates  on  our
trade customers and bottlers.  Although PepsiCo expects to report
lower  earnings  in 1995 from its operations in  Mexico  than  it
otherwise  would have because of the devaluation and its  related
effects, PepsiCo has begun to take actions in Mexico and in other
parts  of  the  world to mitigate the effects of the devaluation.
PepsiCo's operations in Mexico, primarily related to snack foods,
constituted  about 5% and 7% of PepsiCo's 1994  consolidated  net
assets   and  cash  flows  from  operations,  respectively,   and
contributed  7%  and 8% of PepsiCo's 1994 net sales  and  segment
operating  profits, respectively.  See Management's  Analysis  of
each  industry  

 11

segment for additional discussion  regarding  the impact  of  the  
devaluation of the Mexican peso.   In  addition, PepsiCo  anticipates that 
earnings from its affiliates in  Mexico accounted  for  by  the  equity  
method,  primarily  related   to beverages,  will  also be unfavorably 
impacted.   Equity  results reported in 1994 from affiliates in Mexico were 
not material.

      As  quantified  in Other Factors on page 9, comparisons  of
1995  to 1994 will be adversely affected by the additional week's
results in the 1994 fiscal year.

Management's Analysis - Results of Operations

(See  Management's Analysis - Overview on page 7  for  background
information and Business Segments on page F-9 for detail of segment
results.)

      To  improve  comparability, Management's Analysis  includes
analytical data to indicate the impact of beverage and snack food
acquisitions,  net  of  operations sold or contributed  to  joint
ventures (collectively, "net acquisitions").  Acquisition impacts
represent  the results of the acquired businesses for periods  in
the current year corresponding to the prior year periods that did
not  include  the  results of the businesses.   Restaurant  units
acquired, principally from franchisees, and constructed units are
treated   the  same  for  purposes  of  this  analysis  and   are
collectively referred to as "additional restaurant units."  Also,
the  analysis indicates, as applicable, the impact of the ongoing
effects of the 1994 accounting changes (see Notes 13 and 14), the
1994 BAESA gain (see Note 4), the 1993 deferred tax charge due to
U.S.  tax  legislation (see Note 17) and the  1992  restructuring
charges  (see Note 16), collectively referred to as "the  Unusual
Items."

      Comparisons of 1994 to 1993 were impacted by an  additional
week's results in 1994 which contributed about $433.5 million  or
2  points to growth in Net Sales and increased earnings by  about
$54.0 million ($34.9 million after-tax or $0.04 per share).

      Net  Sales  rose $3.5 billion or 14% in 1994 of which  $215
million  or  1  point was contributed by net  acquisitions.   The
balance  of  the increase reflected volume gains of $2.2  billion
and  $934 million due to additional restaurant units.  Sales grew
$3.1  billion or 14% in 1993.  Net acquisitions contributed  $1.1
billion or 5 points to sales growth.  The balance of the increase
reflected  $913 million from additional restaurant units,  volume
gains   that   contributed  $850  million  and  higher   pricing.
International  sales grew 23% in 1994 and 24% in  1993  with  net
acquisitions  contributing 1 point and 16  points,  respectively.
International sales represented 29%, 27% and 25% of  total  sales
in  1994, 1993 and 1992, respectively.  The long-term trend of an
increasing international component of sales may be interrupted in
the  near  term  as  a result of the unfavorable  impact  of  the
devaluation of the Mexican peso in late 1994 and early  1995  and
its related effects.

      Cost of sales as a percentage of Net Sales was 48.2%, 47.7%
and  48.3% in 1994, 1993 and 1992, respectively.  The decline  in
the  1994  gross  margin  reflected a mix shift  to  lower-margin
businesses  in international beverages and worldwide  restaurants
and lower net pricing in domestic beverages, partially offset  by
a   mix   shift   to  higher-margin  packages  and  products   in
international  snack  foods  and  manufacturing  efficiencies  in
domestic  snack  foods.   The 1993 gross margin  improvement  was
driven  by  lower  product costs (packaging and  ingredients)  in
domestic beverages.

      Selling,  general and administrative expenses rose  14%  in
1994 and 13% in 1993, reflecting base business growth.  Excluding
the  Unusual Items, Selling, general and administrative  expenses
rose  14%  in  1994 and 16% in 1993, and as a percentage  of  Net
Sales  were  39.6%,  39.4%  and 38.8% in  1994,  1993  and  1992,
respectively.   In  1994,  Selling,  general  and  administrative
expenses  grew at the same rate as sales.  In 1993,  selling  and
distribution  expenses  grew at a faster  rate  than  sales,  but
marketing  expenditures  grew at a slower  rate.   These  changes
reflect  the impact of worldwide bottling acquisitions  and  flat
marketing expenditures in domestic beverages.

     Amortization of intangible assets rose 3% in 1994 and 14% in
1993.   This  noncash  expense reduced Net Income  Per  Share  by
$0.29, $0.28 and $0.24 in 1994, 1993 and 1992, respectively.

 12


      Operating  Profit increased 10% in 1994 and  23%  in  1993.
Excluding  the  Unusual  Items, operating profit  increased  $262
million or 9% in 1994 and $342 million or 13% in 1993, driven  by
combined segment operating profit growth of 7% in 1994 and 14% in
1993.   The  1994  increase reflected $850  million  from  higher
volumes  and  $73  million  from  additional  restaurant   units,
partially  offset by higher operating expenses.  Growth  in  1993
reflected  $425 million from higher volumes and $89 million  from
additional  restaurant  units,  partially  offset  by   increased
operating  expenses.  International segment profits grew  12%  in
1994  and 8% in 1993, reflecting double-digit increases in  snack
foods  and beverages, partially offset by a double-digit  decline
in  restaurants.  International profits represented 19%, 18%  and
19% of combined segment operating profits in 1994, 1993 and 1992,
respectively.  This percentage may be affected in the  near  term
due  to  the  devaluation of the Mexican  peso  and  its  related
effects.  Small foreign exchange gains in 1994 compared to 1993's
foreign  exchange losses, and increased equity in net  income  of
affiliates, which are not included in segment profits, aided 1994
total operating profit growth.

     Gain on Joint Venture Stock Offering of $17.8 million ($16.8
million  after-tax  or  $0.02 per share) related  to  the  public
offering of shares by the BAESA joint venture.  See Note 4.

      Interest expense, net of Interest income, increased 15%  in
1994  and 2% in 1993.  The 1994 increase reflected higher average
borrowings   partially  offset  by  higher  interest   rates   on
investment balances.  The change in 1993 reflected higher average
borrowings  and  lower  average  short-term  investment  balances
partially  offset by lower interest rates.  Excluding the  impact
of  net acquisitions, net interest expense increased 10% in  1994
and declined 9% in 1993.

      Provision for Income Taxes as a percentage of pretax income
was  33.0%, 34.5% and 31.4% in 1994, 1993 and 1992, respectively.
The  1993  effective tax rate, excluding the  Unusual  Item,  was
33.3%.   The  slight  decline  in  1994  reflected  reversal   of
valuation  allowances  related to  deferred  tax  assets  and  an
increase in the proportion of income taxed at lower foreign rates
offset  by the absence of 1993's favorable adjustment of  certain
prior  year  foreign accruals.  The 1993 increase of  1.9  points
reflected  higher  U.S.  and  foreign  effective  tax  rates,  an
increase in the proportion of income taxed at the higher U.S. tax
rate  and  higher state taxes, partially offset by the  favorable
adjustment of prior year accruals.

      Income  and  Income Per Share Before Cumulative  Effect  of
Accounting  Changes  ("income" and "income per  share")  in  1994
increased 12% to $1.8 billion and 13% to $2.22, respectively, and
in  1993  increased  22%  to  $1.6  billion  and  22%  to  $1.96,
respectively.  Excluding the Unusual Items, income and income per
share  rose  8% and 9%, respectively, in 1994 and  13%  and  12%,
respectively, in 1993.  Growth in income per share was  depressed
by  estimated dilution from acquisitions of $0.03 or 1  point  in
1994   and  $0.05  or  3  points  in  1993,  primarily   due   to
international beverage acquisitions in both years.

      The  Mexican  peso devaluation may unfavorably  impact  Net
Sales  and Net Income in 1995; however, due to many uncertainties
in  Mexico, we  are unable to quantify  the  impacts.   See
Management's Analysis - Overview on page 7 and pages 15 , 19  and
22   for  each  industry  segment for  discussion  regarding  the
impacts.

Management's Analysis - Financial Condition

(See  Management's Analysis - Overview on page 7  for  background
information.)

      Assets  increased $1.1 billion or 5% over 1993.  Short-term
investments  largely  represent high-grade marketable  securities
portfolios  held outside the U.S.  The portfolio in Puerto  Rico,
which  totaled $853 million at year-end 1994 and $1.3 billion  at
year-end  1993,  arises  from the operating  cash  flows  of  the
centralized  concentrate  manufacturing  facility  that  operates
under  a  tax  incentive  grant.  The  grant  provides  that  the
portfolio  funds  may  be  remitted  to  the  U.S.  without   any
additional  tax.  PepsiCo remitted $380 million of the  portfolio
to   the  U.S.  in  1994  and  $564  million  in  1993.   PepsiCo
continually reassesses its alternatives to redeploy its  maturing
investments in this and other portfolios held outside  the  U.S.,
considering  other  investment  opportunities  and   risks,   tax
consequences and overall financing strategies.

 13

     Liabilities rose $569 million or 3% over 1993.  Income taxes
payable  decreased $152 million or 18%, reflecting the prepayment
of  taxes  in  1994  related  to  a  federal  tax  audit.   Other
liabilities   increased  $510  million  or  38%,   reflecting   a
reclassification  of  amounts  from  Other  current  liabilities,
normal  growth  in  long-term liabilities and  recognition  of  a
liability for postemployment benefits under SFAS 112.

      At  year-end 1994 and 1993, $4.5 billion and $3.5  billion,
respectively, of short-term borrowings were classified  as  long-
term,  reflecting  PepsiCo's  intent  and  ability,  through  the
existence of its unused revolving credit facilities, to refinance
these  borrowings.   PepsiCo's  unused  credit  facilities   with
lending   institutions,  which  exist  largely  to  support   the
issuances of short-term borrowings, were $3.5 billion at year-end
1994  and 1993.  Effective January 3, 1995, PepsiCo replaced  its
existing credit facilities with new credit facilities aggregating
$4.5  billion,  of  which $1.0 billion expire in  1996  and  $3.5
billion  expire  in  2000.   Annually, these  facilities  can  be
extended  an additional year upon the mutual consent  of  PepsiCo
and the lending institutions.

      Financial Leverage is measured by PepsiCo on both a  market
value and historical cost basis.  PepsiCo believes that the  most
meaningful  measure of debt is on a net basis, which  takes  into
account  its  large investment portfolios held outside  the  U.S.
These  portfolios  are  managed  as  part  of  PepsiCo's  overall
financing  strategy  and are not required to  support  day-to-day
operations.   Net debt reflects the pro forma remittance  of  the
portfolios  (net of related taxes) as a reduction of total  debt.
Total   debt  includes  the  present  value  of  operating  lease
commitments.

      PepsiCo believes that market leverage (defined as net  debt
as  a  percent of net debt plus the market value of equity, based
on  the  year-end  stock  price) is  an  appropriate  measure  of
PepsiCo's  financial leverage.  Unlike historical cost  measures,
the  market value of equity primarily reflects the estimated  net
present  value  of  expected future cash  flows  that  will  both
support debt and provide returns to shareholders.  The market net
debt  ratio  was  26% at year-end 1994 and 22% at year-end  1993.
The  increase was due to a 13% decrease in PepsiCo's stock  price
as well as an 8% increase in net debt.  PepsiCo has established a
long-term target range of 20-25% for its market net debt ratio to
optimize its cost of capital.

      As  measured on an historical cost basis, the ratio of  net
debt  to  net  capital  employed  (defined  as  net  debt,  other
liabilities, deferred income taxes and shareholders' equity)  was
49%  at year-end 1994 and 50% at year-end 1993.  The decline  was
due to a 9% increase in net capital employed, partially offset by
the increase in net debt.

      Because of PepsiCo's strong cash generating capability  and
its  strong financial condition, PepsiCo has continued access  to
capital markets throughout the world.

      At year-end 1994, about 60% of PepsiCo's net debt portfolio
was  exposed  to variable interest rates, up from  about  55%  in
1993.   In  addition  to variable rate debt, all  net  debt  with
maturities  of  less  than one year is categorized  as  variable.
PepsiCo  prefers funding its operations with variable  rate  debt
because it believes that, over the long-term, variable rate  debt
provides  more  cost effective financing than  fixed  rate  debt.
PepsiCo  will  issue  fixed  rate  debt  if  advantageous  market
opportunities  arise.   A 1 point change  in  interest  rates  on
variable rate net debt would impact annual interest expense,  net
of  interest  income, by approximately $38 million  ($21  million
after-tax or $0.03 per share) assuming the level and mix  of  the
December 31, 1994 net debt portfolio was maintained.

     PepsiCo's negative operating working capital position, which
principally  reflects  the cash sales nature  of  its  restaurant
operations,   effectively   provides   additional   capital   for
investment.  Operating working capital, which excludes short-term
investments  and  short-term  borrowings,  was  a  negative  $677
million and $849 million at year-end 1994 and 1993, respectively.
The  $172  million decline in negative working capital  primarily
reflected   reclassification  of  amounts  from   Other   current
liabilities to Other Liabilities and base business growth in  the
more working capital intensive bottling and snack food operations
exceeding the growth in restaurant operations.

     Shareholders' Equity increased $517 million or 8% from 1993.
This  change  reflected an 18% increase in retained earnings  due
to  $1.8  billion in net income less dividends declared  of  $555
million.   This growth was offset by a $448 million  increase  in
treasury  stock that reflected share repurchases, net  of  shares
used  for  stock option exercises and acquisitions,  and  a  $287
million   unfavorable   change  in   the   currency   translation
adjustment  account  

 14

(CTA).  The CTA change  primarily  reflected the  impact of the 
devaluation of the Mexican peso in  late  1994 on the translation of our 
peso denominated net assets.

     Based  on  income  before cumulative  effect  of  accounting
changes, PepsiCo's return on average shareholders' equity  (ROAE)
was  27.0% in 1994 and 27.2% in 1993.  The ROAE was 26.5% in 1994
and  25.3%  in 1993, excluding from both income and shareholders'
equity  the  effect of the accounting changes and BAESA  gain  in
1994  as  well as the $29.9 million charge in 1993  due  to  1993
U.S. tax legislation.

Management's Analysis  -  Cash Flows

(See  Management's Analysis - Overview on page 7  for  background
information.)

      Cash flow activity in 1994 reflected strong cash flows from
operations of $3.7 billion and $421 million in net proceeds  from
short-term  investment activities.  These amounts  were  used  to
fund  capital  spending  of $2.3 billion, purchases  of  treasury
stock  totaling $549 million, dividend payments of $540  million,
acquisition  activity of $316 million and net debt repayments  of
$204 million.

     One of PepsiCo's most significant financial strengths is its
internal  cash  generation capability.  In  fact,  after  capital
spending   and  acquisitions,  each  industry  segment  generated
positive  cash  flows in 1994,  with particularly strong  results
from  beverages  and snack foods.  Net cash flows from  PepsiCo's
domestic  businesses were partially offset by international  uses
of   cash,   reflecting  strategies  to  accelerate   growth   of
international operations.

     The significant devaluation of the Mexican peso in late 1994
and  early 1995 did not materially impact 1994 consolidated  cash
flows.    However,   because  PepsiCo's  operations   in   Mexico
represented  approximately  7% of consolidated  cash  flows  from
operations  in 1994, the devaluation and its related effects  are
expected  to have an unfavorable impact on 1995 cash  flows  from
operations.   In  addition to the actions taken to  mitigate  the
unfavorable impact on operating profits, the operations in Mexico
will  defer  a  portion of their capital spending.   Nonetheless,
significant uncertainties remain in Mexico and, as a  result,  it
is  not  possible to quantify the impact on 1995 cash flows.   In
addition,  actions are being taken in other parts  of  the  world
intended  to  mitigate the impact.  See Management's  Analysis  -
Overview on page 7 for additional discussion.

      Net Cash Provided by Operating Activities in 1994 rose $582
million  or 19% over 1993, and in 1993 grew $423 million  or  16%
over 1992.  Income before noncash charges and credits rose 6%  in
1994  and  24%  in  1993.   The  increases  in  depreciation  and
amortization  noncash charges of $132 million in  1994  and  $229
million   in  1993  reflected  capital  spending  and  in   1993,
acquisitions.  The 1994 decrease of $150 million in the  deferred
income  tax provision was primarily due to the effect in 1994  of
converting  from  premium  based  casualty  insurance  to   self-
insurance  for  most  of these risks and adopting  SFAS  112  for
accounting  for  postemployment benefits.  The 1993  increase  of
$135  million in the deferred income tax provision was  primarily
due  to  the  lapping  of 1992 effects related  to  restructuring
accruals  and prefunded employee benefit expenses and the  impact
of  1993  U.S. tax legislation.  The cash provided in  1994  from
working  capital  was $357 million better than  1993,  reflecting
normal  increases  in  accrued  liabilities  across  all  of  our
businesses, lapping the effect of higher income tax payments  and
a   lower   provision  in  1993  and  improved  trade  receivable
collections,  partially offset by the impact on accounts  payable
of  the  timing  of a large year-end payment to prefund  employee
benefits.   The  1993 over 1992 net increase of $257  million  in
cash   used  for  operating  working  capital  reflected   slower
collections  of  domestic accounts receivable,  advance  domestic
purchases  of product ingredients, the higher payments of  income
taxes  and  the  lapping  of 1992 and  1991  effects  related  to
restructuring  accruals,  partially  offset  by  the  payment  to
prefund employee benefits.

      Investing  Activities over the past three  years  reflected
strategic spending in all three industry segments through capital
spending,  acquisitions and investments in  affiliates.   PepsiCo
seeks  investments that generate cash returns in  excess  of  its
long-term cost of capital, which is estimated to be approximately
11% at year-end 1994.  See Note 5 for a discussion of acquisition
activity.   About 75% of the total acquisition activity  in  1994
represented international transactions, compared to 45%  in  1993
and  60%  in  1992.   PepsiCo continues to seek opportunities  to
strengthen   its  position  in  its  domestic  and  international
industry segments through such strategic acquisitions.

 15

      Increased capital spending in 1994 was driven by  beverages
reflecting  investments in equipment for new  packaging  and  new
products   in  the  U.S.  and  emerging  international   markets,
primarily Eastern Europe.  Capital spending increases in 1993 and
1992  were  driven  by  restaurants,  primarily  for  new  units.
Restaurants represented about half of the total capital  spending
in  all  three  years.  Restaurants, beverages  and  snack  foods
represent  40%, 30% and 30%, respectively, of the estimated  $2.4
billion  spending in 1995.  This reflects a shift primarily  from
restaurants  to  snack  foods.  Beverages and  snack  foods  1995
capital  spending  reflects  production  capacity  expansion  and
equipment  replacements, while restaurants is primarily  for  new
units.   Restaurant  capital spending  in  1995  may  be  further
reduced depending upon future decisions as described beginning on
page  23.   Approximately one-third of the planned  1995  capital
spending relates to international businesses, about the  same  as
the  prior three years.  Cash provided by operations is  expected
to be sufficient to fund the expected capital spending.

      Investment  activity  in PepsiCo's  short-term  portfolios,
primarily  held outside the U.S., provided $421 million  in  1994
and $259 million in 1993, respectively, compared to the increased
net investment of $52 million in 1992.

      Financing Activities.   The 1994 over 1993 change  in  cash
flows  from  net financing activities was a use of $937  million,
primarily  reflecting net repayments of short and long-term  debt
of $204 million compared to net proceeds of $590 million in 1993.
The 1993 over 1992 change in cash flows from financing activities
was  a  use of $328 million, primarily due to increased purchases
of treasury stock.

      At  year-end  1994,  PepsiCo had authority  to  issue  $3.4
billion  of  long-term debt and had facilities in  place  in  the
U.S.,   Europe  and  Japan  to  take  advantage  of   marketplace
opportunities.    The   principal   purposes   of   these   shelf
registrations are for financing growth activities and refinancing
borrowings.

      Cash dividends declared were $555 million in 1994 and  $486
million in 1993.  PepsiCo targets a dividend payout of about one-
third  of  the prior year's income from ongoing operations,  thus
retaining sufficient earnings to provide financial resources  for
growth opportunities.

       Share   repurchase  decisions  are  evaluated  considering
management's  target  capital  structure  and  other   investment
opportunities.  In 1994, PepsiCo repurchased 15.0 million  shares
at  a  cost  of  $549  million.  Subsequent to year-end,  PepsiCo
repurchased 3.4 million shares through February 7, 1995 at a cost
of  $121  million.   Including these  repurchases,  18.8  million
shares   have  been  repurchased  under  the  50  million   share
repurchase  authority granted by PepsiCo's Board of Directors  on
July 22, 1993.

                           Beverages

Management's Analysis

See  Management's  Analysis - Overview on page 7  for  background
information  and discussion of the fifty-third week in  1994  and
Business  Segments on page F-9 for detailed results.   Net  sales
and  operating profits within this discussion include the  impact
of  the  fifty-third week.  System bottler case  sales  of  Pepsi
Corporate  brands (case sales) were not impacted  by  the  fifty-
third week because they are measured on a calendar year basis.
                                
     1994 vs. 1993

      Worldwide net sales increased $1.0 billion or 12%  to  $9.7
billion.  The fifty-third week contributed approximately 1  point
to  the  sales growth with domestic and international  operations
benefiting   by   about  2  points  and  1  point,  respectively.
Comparisons are affected by acquisitions, consisting primarily of
franchised bottling operations in the U.S. and Asia, as  well  as
the  absence  of  certain  small  bottling  operations  sold   or
contributed to joint ventures (collectively, "net acquisitions").
Net  acquisitions, principally domestic, contributed $161 million
or 2 points to worldwide sales growth.

 16

      Domestic  sales rose $623 million or 11% to  $6.5  billion.
Net  acquisitions contributed $158 million or 3 points  to  sales
growth.   Volume  growth  contributed  $510  million,  driven  by
carbonated  soft  drink (CSD) packaged products.   This  benefit,
combined  with  a  mix  shift  to the  higher-priced  alternative
beverage  packaged products and higher concentrate  and  fountain
syrup  pricing,  was  partially offset by lower  net  pricing  to
retailers and a mix shift to The Cube, our value-priced  24-pack.
The  lower  net  pricing reflected increased price discounts  and
promotional  allowances  for CSD in  response  to  private  label
competition  and  Lipton brand tea.  See Note  1  for  discussion
concerning   classification  of  promotional  price   allowances.
Domestic  alternative beverages comprise primarily  Lipton  brand
tea,  All Sport and Ocean Spray Lemonade products.  CSD comprises
the balance of the Pepsi Corporate beverage portfolio.

      Case sales volume consists of sales of packaged products to
retailers  and  through vending machines and  fountain  syrup  by
company-owned and franchised bottlers.  Previously existing Ocean
Spray  products sold to retailers under a distribution  agreement
are  not  included in reported case sales growth.  Domestic  case
sales increased 6%, reflecting strong double-digit growth in  the
Mountain  Dew brand and solid gains in Brand Pepsi.   Case  sales
growth  also  benefited by strong double-digit growth  in  Lipton
brand  tea  and  gains in the Diet Pepsi brand.  These  advances,
combined  with the national distribution of All Sport  and  Ocean
Spray  Lemonade  in  1994  and gains in the  Slice  brands,  were
partially  offset  by significant declines in the  Crystal  Pepsi
brands.   Alternative beverages contributed 2 points to the  case
sales growth.  Case sales of fountain syrup grew at a slower rate
than packaged products.

      International  sales  rose $426  million  or  16%  to  $3.2
billion.   This  growth reflected higher volume of $300  million,
the   start-up   of   company-owned  bottling  and   distribution
operations, principally in Eastern Europe, and the first year  of
sales  of  Stolichnaya  vodka under the 1994  appointment  of  an
affiliate  of  Grand  Metropolitan  as  the  exclusive  U.S.  and
Canadian  distributor.  Higher concentrate pricing was offset  by
an  unfavorable currency translation impact and lower net pricing
on  packaged  products.   The  unfavorable  currency  translation
impact  reflected  a weaker Canadian dollar, Spanish  peseta  and
Mexican peso, partially offset by a stronger Japanese yen.

      International  case sales increased 9%,  reflecting  strong
double-digit  growth in Asia, led by China and India,  and  solid
advances  in Latin America, as growth in Mexico more than  offset
declines  in  Venezuela.  Latin America and Mexico represent our
largest    international   case   sales   region   and   country,
respectively.   Double-digit advances in Eastern Europe  and  the
Middle  East, combined with single-digit growth in Western Europe
and  Canada, were partially offset by declines in Africa.   Pepsi
Max, a new low-calorie cola, aided case sales growth.

     Worldwide operating profits increased $108 million or 10% to
$1.2  billion.   The fifty-third week enhanced profit  growth  by
approximately 2 points with domestic and international operations
benefiting by about 1 point and 2 points, respectively.

      Domestic  profits  increased $85  million  or  9%  to  $1.0
billion.   Volume gains, driven by packaged products, contributed
$305  million to profit growth.  This benefit, combined with  the
higher  concentrate  and  fountain syrup pricing,  was  partially
offset  by  higher operating expenses, the lower net  pricing  to
retailers, the mix shift to The Cube and increased product costs.
Selling  and  distribution expenses grew at a  faster  rate  than
sales,  driven by higher volume-driven labor costs.   Advertising
and   marketing  costs  grew  at  a  slower  rate   than   sales.
Administrative expenses declined modestly reflecting savings from
a  1994 consolidation of headquarters and field operations and  a
reduction  in  the scope of the 1992 restructuring actions,  both
discussed  below.  These benefits were largely offset  by  normal
increases  in  administrative expenses.   The  increased  product
costs  reflected  the  mix shift to the higher  cost  alternative
beverages and higher ingredient costs, partially offset by  lower
packaging  costs.  Alternative beverages, driven by Lipton  brand
tea,  aided  the  profit  growth.   The  domestic  profit  margin
declined slightly to 15.6%.

      In  the  third  quarter of 1994, Pepsi-Cola  reversed  into
income  $24.2 million of the $115.4 million restructuring accrual
established  in  1992  and,  in the third  and  fourth  quarters,
recorded  additional  charges totaling $22.3  million,  primarily
reflecting   management's   decision   to   further   consolidate
headquarters  and  field  operations.   The  1994  charges  cover
severance   costs  associated  with  employee  terminations   and
relocation costs for employees 

 17

who, in 1994, have accepted offers to  relocate.  See 1993 vs. 1992 
discussion for a description  of the 1992 restructuring charge.

      The $24.2 million reversal reflects both refinements of the
estimates  originally used to establish the accrual,  principally
for  costs  associated with displaced employees, and management's
decision   to  reduce  the  scope  of  the  restructuring.    The
nationwide   implementation   of  several   of   the   anticipated
administrative and business process redesigns has been completed,
with  the balance of the redesigns projected to be completed over
the next three years.

      The  benefits  of the restructuring activities  when  fully
implemented  were  originally projected to be approximately  $105
million  annually, based on reduced employee and facility  costs.
The  current projection of annual benefits from these sources has
decreased  to approximately $40 million reflecting, in part,  the
reduced  scope of the restructuring.  While difficult to measure,
in  1994 Pepsi-Cola estimated other sources of benefits from  the
restructuring  of  approximately $90 million annually,  based  on
centralization  of  purchasing activities and incremental  volume
and  pricing  from  improvements in administrative  and  business
processes.   These  additional  sources  of  benefits,   although
identified  when the 1992 restructuring accrual was  established,
were  not  included  in  the projected  annual  benefits  due  to
significant  uncertainties and difficulties  in  quantifying  the
amounts, if any, of such benefits.  Due to delays in implementing
some  of  the  restructuring actions,  full  realization  of  the
expected  benefits also has been delayed.  Benefits in 1994  were
offset   by  incremental  costs  associated  with  the  continued
development  and  implementation of  the  restructuring  actions.
This offset is expected to continue into 1995.  Net benefits  are
expected  to  begin in 1996 and to increase annually until  fully
realized  in  1998.  All benefits derived from the  restructuring
actions  will  be  reinvested in the business to  strengthen  our
competitive position.

      International profits increased $23 million or 13% to  $195
million.   Net  acquisitions reduced profits by $9 million  or  5
points.   The  increased profits reflected volume growth  of  $75
million,  led  by concentrate shipments.  This benefit,  combined
with  a  decline  in  advertising  and  marketing  expenses   not
attributed  to volume growth, was partially offset  by  increased
field  and headquarters administrative expenses, start-up losses,
principally  in  Eastern  Europe,  and  an  unfavorable  currency
translation  impact,  primarily from the  Mexican  peso  and  the
Canadian dollar.  The increased administrative expenses reflected
costs  to  support expansion in developing markets.   The  higher
concentrate pricing was partially offset by a decline in finished
product  sales to franchised bottlers, principally in Japan,  and
the  lower  net pricing on packaged products.  Increased  profits
from  the  first  year of sales of Stolichnaya,  under  the  1994
appointment  of  an  affiliate  of  Grand  Metropolitan  as   the
exclusive  U.S.  and Canadian distributor, aided  profit  growth.
The  new  Pepsi Max product significantly contributed  to  profit
growth.   Profits increased in Latin America, led by Mexico,  and
in  Western  Europe, reflecting significantly reduced  losses  in
Germany.   Profits  also  grew in Asia,  reflecting  advances  in
Japan.   The profit growth was restrained by start-up  losses  in
Eastern  Europe and declines in Canada, reflecting private  label
competition.  The international profit margin remained relatively
unchanged at 6.2%.

      The  1992 restructuring actions to streamline the  acquired
Spanish   franchised   bottling  operation   were   substantially
completed in 1994.  These actions have resulted in total  savings
approximating  $15  million in 1994, with  total  annual  savings
expected  to  grow to about $20 million in 1995, consistent  with
our  original  projection.  These savings  will  continue  to  be
reinvested  in  our  businesses  to  strengthen  our  competitive
position.

     The significant devaluation of the Mexican peso in late 1994
and  early  1995  did  not materially impact  1994  international
beverage operating profits.  However, because Mexico, our largest
profit  country,  represented approximately 22% of  international
beverage  operating  profits in 1994,  the  devaluation  and  its
related  effects  are expected to have an unfavorable  impact  on
1995  operating profits.  The operations in Mexico have begun  to
take  actions to increase volume, enhance net pricing and  reduce
costs,   including  evaluating  alternative   sourcing   of   raw
materials.   Nonetheless,  significant  uncertainties  remain  in
Mexico  and,  as  a result, it is not possible  to  quantify  the
impact.   International beverages has also begun to take  actions
in several other countries in 1995 to help mitigate the impact.


 18

     1993 vs. 1992

      Worldwide net sales increased $1.0 billion or 14%  to  $8.6
billion.    Comparisons   are  affected  by   net   acquisitions,
consisting  primarily  of  acquisitions  of  franchised  bottling
operations  in  Spain and the U.S., as well  as  the  absence  of
results  of certain small international bottling and distribution
operations   sold  or  contributed  to  a  joint  venture.    Net
acquisitions  contributed $697 million or 10 points to  worldwide
sales growth.

      Domestic  sales  grew $433 million or 8% to  $5.9  billion.
Acquisitions  contributed $222 million or 4  points  of  domestic
sales growth.  Volume growth, driven by new products, contributed
approximately  $170  million.  The balance of  the  sales  growth
reflected  a  mix shift to new products with higher  net  prices,
principally  the  new  Lipton Original brand  ready-to-drink  tea
products and certain Ocean Spray brand juice products.

      Domestic case sales increased 3%, reflecting the impact  of
the  late  1992  introduction of Crystal Pepsi and  Diet  Crystal
Pepsi  brands, the growth in Mountain Dew brands and the expanded
distribution  of new Lipton brand tea products.   Case  sales  of
fountain  syrup  grew  at  the same rate  as  packaged  products.
Excluding the Lipton products, case sales volume grew 2%,  driven
by  a  double-digit increase in Mountain Dew.  Case sales of  the
Crystal  Pepsi brands offset a decline in brands Pepsi  and  Diet
Pepsi.

      International  sales  rose $600  million  or  28%  to  $2.7
billion.  Net acquisitions contributed $476 million or 22  points
of  sales  growth.   The  balance of the sales  growth  reflected
higher  concentrate pricing, led by Latin America as well as  the
start-up  of company-owned distribution operations in France  and
Eastern  Europe.   Sales growth was depressed by the  unfavorable
currency  translation impact of a stronger U.S.  dollar  in  both
concentrate and bottling operations.  A small decline in existing
bottling  operations reflected lower pricing in Germany,  largely
offset by higher prices and volumes in Greece.

      International  case  sales rose 7%.   Excluding  the  newly
acquired  KAS  flavor brands in Spain, international  case  sales
grew  5%.   This  performance reflected solid advances  in  Latin
America as well as double-digit growth in Asia, led by China  and
Pakistan, and in Eastern Europe, led by Turkey and Hungary.   The
Middle East, particularly Saudi Arabia, also contributed to  case
sales growth.

     Worldwide operating profits increased $310 million or 39% to
$1.1  billion.  Excluding the 1992 restructuring charges totaling
$145  million ($115.4 million for domestic and $29.6 million  for
international), profits were up 18%.

      The  1992  domestic  charge arose  from  an  organizational
restructuring  designed to improve customer focus  by  realigning
resources  consistent with Pepsi-Cola's "Right Side Up" operating
philosophy,  as  well  as  a redesign of key  administrative  and
business   processes.   The  organizational   restructuring   was
completed  in 1992.  The redesign of core processes  is  ongoing.
The   charge  included  provisions  for  costs  associated   with
redeployed  and  displaced  employees,  the  redesign   of   core
processes and office closures.

       The  international  restructuring  charge,  which  related
primarily  to  displaced  employees, included  $18.5  million  to
streamline  the  acquired Spanish franchised bottling  operation.
This  amount represented 30% (PepsiCo's ownership interest  prior
to  the acquisition of the remaining interest) of the total  cost
of  the  streamlining.  The remaining $11.1 million of the charge
represented  costs  associated with  streamlining  the  worldwide
field  management organization which was substantially  completed
in 1993.

      The  costs provided for in these domestic and international
restructuring actions and the related savings are principally  of
a  cash  nature.   The  benefits of the  completed  international
worldwide  actions resulted in annual savings of $7  million,  as
originally projected.  The savings will continue to be reinvested
in the business to strengthen our competitive position.

      Domestic  profits increased $250 million  or  37%  to  $937
million.   Excluding the 1992 restructuring charge, profits  grew
$135  million  or  17%.   Volume  gains,  led  by  new  products,
contributed  about $90 million to profits. 

 19

The combined  benefit of lower packaging and ingredient costs and the 
favorable product mix  shift  was  largely  offset by  higher  operating  
expenses. Profit growth also benefited from a $12 million reduction in
retiree health care expense due to 1993 plan amendments described
in  Note  12, as well as a $9 million credit arising from  a  net
adjustment  of  accruals  related to prior  years'  acquisitions.
Promotional  costs  were  about even  with  last  year;  however,
selling  and administrative expenses grew at a faster  rate  than
sales due to transitional costs to support the organizational and
process redesign initiatives discussed above.  This higher  level
of  selling and administrative costs as a percentage of sales  is
expected to continue until the benefits of these initiatives  are
realized.   Sales of the new higher-margin Lipton Original  brand
tea  products  resulted in a significant contribution  to  profit
growth.   The  Crystal  Pepsi products particularly  aided  first
quarter  results,  but  did not significantly  impact  full  year
profits.    The  domestic  profit  margin,  excluding  the   1992
restructuring charge, grew over 1 point to 15.8%.

      International profits increased $60 million or 53% to  $172
million.   Excluding the 1992 restructuring charge, profits  grew
$30  million  or  21%. The profit advance, led by Latin  America,
reflected  higher  concentrate pricing  in  excess  of  increased
operating   expenses,  and  concentrate  shipment   growth   that
contributed  about  $15 million.  These benefits  were  partially
offset   by  increased  losses  in  company-owned  bottling   and
distribution   operations,   led  by   Germany.    Start-ups   of
distribution operations also contributed to the increased losses.
Unfavorable   currency   translation  impacts,   principally   in
concentrate  operations, also negatively affected profit  growth.
A  profit  decline  in  bottling  operations  in  Japan,  due  to
increased  operating expenses, was offset by  growth  in  Canada,
reflecting  administrative cost reductions through  consolidation
of  support  functions  in  recently  acquired  operations.   The
Canadian improvement was achieved despite a $12.2 million  fourth
quarter   1993  charge  to  further  streamline  operations   and
strengthen its competitive position.  Offsetting this effect  was
an  $11.9 million credit in the second quarter of 1993 related to
a  settlement of litigation with a former franchised  bottler  in
Europe.  The  international  profit margin,  excluding  the  1992
restructuring  charge, declined almost one-half  point  to  6.3%.
Excluding  the  impact of the lower margin net acquisitions,  the
profit margin grew 1 point.

                           Snack Foods

Management's Analysis

See  Management's  Analysis - Overview on page 7  for  background
information  and discussion of the fifty-third week in  1994  and
Business  Segments on page F-9 for detailed results.   Net  sales
and  operating profits within this discussion include the  impact
of  the  fifty-third week while pound and kilo growth  have  been
adjusted to exclude its impact.

     1994 vs. 1993

      Worldwide  net  sales  rose $1.2 billion  or  18%  to  $8.3
billion.  The fifty-third week contributed approximately 2 points
to  the  sales growth with domestic and international  operations
benefiting by about 2 points and 1 point, respectively.

      Domestic  sales grew $646 million or 15% to  $5.0  billion,
reflecting volume growth of $660 million.  Volume gains reflected
growth  in  most  major  brands and line extensions  of  existing
products.    Sales   growth  was  further  aided   by   increased
promotional price allowances and marketing programs to retailers,
which  are  reported as marketing expenses and therefore  do  not
reduce  reported  sales.   See  Note  1  for  further  discussion
concerning  classification  of  promotional  allowances.   Higher
gross  pricing was offset by a sales mix shift to larger,  value-
oriented packages and products with lower gross prices.

      Total domestic pound volume advanced 13%.  This performance
was  led  by  strong  double-digit growth in Lay's  brand  potato
chips,  reflecting the successful promotion of Wavy  Lay's  brand
potato  chips and growth of Lay's KC Masterpiece Barbecue  Flavor
brand  potato chips, Rold Gold and Rold Gold Fat Free Thins brand
pretzels  and Tostitos brand tortilla chips, driven by Restaurant
Style  Tostitos  brand  and the expanded  distribution  of  Baked
Tostitos  brand.  Doritos brand tortilla chips had solid  single-
digit  volume  growth while Fritos brand corn chips and  

 20

Chee.tos brand  cheese flavored snacks reflected low double-digit  
growth. Ruffles brand potato chips showed modest growth.

      International  sales  rose $592  million  or  22%  to  $3.3
billion.   Confectioneries (primarily candy and cookies)  account
for   approximately  30%  of  international  snack  food   sales.
Acquisitions contributed $67 million or 2 points to sales growth.
The  balance  of  the sales growth was driven by higher  volumes,
which  contributed $590 million, led by successful promotions  by
the  Sabritas  snack  chip  and  candy  business  in  Mexico.   A
favorable brand mix shift to higher-priced products, primarily in
Latin  America  and  the U.K., and higher  pricing  were  largely
offset  by  the  unfavorable currency  translation  impact  of  a
stronger U.S. dollar, principally against the Mexican peso.

     International kilo growth is reported on a systemwide basis,
which  includes  both consolidated businesses and joint  ventures
operating  for  at least one year.  Systemwide snack  chip  kilos
rose 16%, led by strong double-digit growth at Sabritas, in Spain
and  Brazil and solid gains in the U.K.  Systemwide confectionary
kilos  also grew 16%, reflecting double-digit advances at  Gamesa
and Sabritas and gains in Egypt and Poland.

     Worldwide operating profits increased $187 million or 16% to
$1.4   billion.   The  fifty-third  week  enhanced   profits   by
approximately 2 points with domestic and international operations
benefiting by about 3 points and 1 point, respectively.

      Domestic profits grew $124 million or 14% to $1.0  billion.
This   performance   reflected  strong   volume   growth,   which
contributed  $340 million.  This growth was partially  offset  by
the impact of increased operating and manufacturing costs and  an
unfavorable   sales  mix  shift  to  lower-margin  packages   and
products.   Increased  operating  costs  were  driven  by  higher
selling,  distribution  and  new  system  costs  in  addition  to
increased  investment  in  marketing  costs  to  maintain  strong
momentum in 1995.  Increased capacity costs were partially offset
by  manufacturing efficiencies.  Higher vegetable oil costs  were
substantially  offset  by  lower  packaging  and  potato   costs.
Increased promotional price allowances and merchandising  support
largely  offset higher pricing on certain brands.   The  domestic
profit margin remained relatively unchanged at 20.5%.

      Though difficult to forecast, there are no material changes
expected  in potato costs for 1995.  However, potato prices  have
been  less predictable in recent years due to weather conditions.
Vegetable  oil prices are expected to decline slightly  from  the
high  1994  levels  while the cost of packaging  is  expected  to
increase.

      International profits increased $63 million or 22% to  $352
million.  Higher volumes contributed $95 million to international
profit  growth,  led  by Sabritas.  The combined  impact  of  the
favorable product and package mix shifts, primarily in  the  U.K.
and  Latin  America, and modestly higher pricing were  more  than
offset   by  higher  direct  and  administrative  costs  and   an
unfavorable  currency translation impact from the  Mexican  peso.
Higher   direct   costs   resulted  primarily   from   investment
initiatives  to  build  brand  equity  and  enhance  distribution
channels  in  Mexico.   Profit growth was also  dampened  by  the
lapping  of last year's noncash credit of $6.1 million  resulting
from  the decision to retain a small snack chip business in Japan
previously  held  for  sale.   The  international  profit  margin
remained relatively unchanged at 10.8%.

      The  international  restructuring charge  in  1992  related
primarily  to actions to consolidate and streamline  the  Walkers
business  in  the  U.K. that were substantially completed  during
1994.  These actions are estimated to result in annual savings of
about  $32  million,  which continue  to  be  reinvested  in  the
business  to strengthen our competitive position.  See  1993  vs.
1992   discussion  for  a  further  explanation   of   the   1992
restructuring charge.

      Strong double-digit profit growth at Sabritas was driven by
higher snack chip and candy volumes.  This benefit, combined with
a  favorable product mix shift to higher-margin snacks and  lower
manufacturing overhead and administrative costs, more than offset
increased  potato  costs,  higher  promotional  spending  and  an
unfavorable currency translation impact.

      Walkers  profits  advanced at a strong  double-digit  rate,
driven  by  a  favorable product mix shift, reflecting  increased
sales  of  higher-margin branded products and the elimination  of
most  lower-margin  private  label products,  

 21

increased  volumes, lower  raw  material and packaging costs and lower  
manufacturing expenses  resulting from the 1992 restructuring  actions.   
These benefits  offset start-up costs related to the launch of  Doritos
brand   tortilla   chips  which  exceeded   incremental   profits
generated.

      Gamesa  posted  strong profit growth on a relatively  small
base,  reflecting a favorable package mix shift to  higher-margin
single  serve  products  and  lower  manufacturing  overhead  and
administrative  costs resulting from cost reduction  initiatives.
These  benefits  were partially offset by higher  product  costs,
selling and distribution costs associated with the expansion of a
direct  delivery  system and an unfavorable currency  translation
impact.

     The significant devaluation of the Mexican peso in late 1994
and early 1995 did not materially impact 1994 international snack
food  operating  profits.  However, because Sabritas  and  Gamesa
combined  represented  approximately 63% of  international  snack
food  operating profits in 1994, the devaluation and its  related
effects  are  expected  to  have an unfavorable  impact  on  1995
operating  profits.  Sabritas and Gamesa have begun  to  increase
pricing   and  reduce  costs,  including  evaluating  alternative
sourcing    of    raw   materials.    Nonetheless,    significant
uncertainties  remain  in Mexico and, as  a  result,  it  is  not
possible  to quantify the impact.  International snack foods  has
also  begun to take actions in several of its other countries  in
1995 to help mitigate the impact.

     1993 vs. 1992

      Worldwide  net  sales  rose $895 million  or  15%  to  $7.0
billion.  Comparisons are affected by international acquisitions,
consisting principally of the securing of a controlling  interest
in  the  Gamesa  (Mexico) cookie business and the buyout  of  the
joint  venture  partner at Hostess Frito-Lay  (Canada),  both  in
1992,  as well as the 1993 reconsolidation of a small snack  chip
business   in  Japan  previously  held  for  sale  (collectively,
"acquisition activity").  Acquisition activity added $383 million
or 7 points to the worldwide sales growth.

      Domestic  sales grew $415 million or 11% to  $4.4  billion.
Volume  growth contributed $320 million to the domestic increase.
Sales  growth  also  reflected higher effective  pricing  through
lower  package weights, partially offset by a sales mix shift  to
larger,  value-oriented packages and products  with  lower  gross
prices.   The higher effective pricing was mitigated by increased
promotional price allowances to retailers, which are reported  as
marketing expenses and therefore do not reduce reported sales.

      Total  domestic pound sales advanced 8%, reflecting double-
digit  growth  in Lay's brand potato chips, Doritos and  Tostitos
brand tortilla chips and Rold Gold brand pretzels.

      International  sales  rose $480  million  or  22%  to  $2.6
billion.   Acquisition activity contributed $383  million  or  18
points to the increase.  The balance of the sales growth, led  by
the  Sabritas snack chip and candy business in Mexico,  reflected
higher  volumes,  which  contributed  $150  million,  and  higher
pricing.   This  growth was partially offset by  the  unfavorable
currency   translation   impact  of  a  stronger   U.S.   dollar,
principally against the British pound.

      International systemwide snack chip volume rose  5%,led  by
double-digit  growth in Canada and Turkey and gains  at  Sabritas
and  in  the U.K.  Confectioneries (primarily candy and  cookies)
account for about 30% of reported international snack food sales.
Systemwide  confectionery  volume grew  7%  reflecting  gains  at
Gamesa and double-digit advances at Sabritas.

     Worldwide operating profits increased $205 million or 21% to
$1.2  billion.   Excluding  a  1992  international  restructuring
charge of $40.3 million, profits increased 16%.

      The  largest  component  of the 1992  restructuring  charge
related  to  actions, many of which were completed  in  1993,  to
consolidate and streamline the Walkers business in the U.K.   The
costs  provided  for in these restructuring actions  and  related
savings   are  principally  of  a  cash  nature.   As  originally
projected,  these actions, when fully implemented, are  currently
expected  to  result  in  annual savings of  about  $35  million,
providing  additional resources for reinvestment in the  business
to strengthen our competitive position.

 22

      Domestic profits rose $125 million or 16% to $901  million.
This  performance reflected volume growth, which contributed $165
million  to  domestic  profits, and a $24  million  reduction  in
retiree health care expense due to 1993 plan amendments described
in  Note  12.  These benefits were partially offset by  increased
manufacturing  costs and other operating expenses  that  exceeded
the  higher effective pricing.  The unfavorable sales  mix  shift
also  depressed  profit growth.  The higher  manufacturing  costs
reflected  a  temporary increase in potato costs of approximately
$25  million  resulting  from  the  effects  of  extreme  weather
conditions in March on the potato crop in the Southern U.S.   The
domestic profit margin rose 1 point to 20.6%.

      Though  difficult to forecast, higher prices  in  1994  for
vegetable oil, resulting from the past summer's flooding  in  the
Midwestern  U.S.,  were  expected to be  partially  offset  by  a
decline in potato prices from 1993 levels.

      International  profits  grew $80 million  or  38%  to  $289
million.   Excluding the 1992 restructuring charge, profits  rose
$39  million  or  16%.   The  profit performance  was  driven  by
Sabritas  and  reflected higher volumes,  which  contributed  $85
million  to  profit growth, and a $6.1 million  credit  resulting
from  the decision to retain the business in Japan.  This  growth
was  partially offset by operating cost increases, net of savings
from  the  restructuring actions announced in 1992, that exceeded
higher  pricing,  and  unfavorable currency translation  impacts.
The international profit margin, excluding the 1992 restructuring
charge,  declined one-half point to 10.9%.  Excluding the  impact
of lower margin acquisitions, the profit margin increased over  1
point.

      Double-digit profit growth at Sabritas was driven by higher
snack  chip and candy volumes.  Increased manufacturing and other
operating expenses were partially offset by higher pricing.

      Profits in the U.K. declined due to an unfavorable currency
translation  impact.   Double-digit  profit  growth  on  a  local
currency   basis  reflected  the  cost  savings  from  the   1992
restructuring  actions, volume gains and a  sales  mix  shift  to
higher   margin   products,   partially   offset   by   increased
manufacturing  costs.  Profit growth was also  depressed  by  the
effect  of  a  1992 credit arising from the final  settlement  of
pension  assets  related  to the 1989  acquisition  of  the  U.K.
operations.  A decline in profits for Poland reflected  increased
manufacturing costs and lower pricing.

      Gamesa  and Hostess Frito-Lay, both acquired midyear  1992,
posted  volume-driven  profit growth for  the  comparable  period
since  acquisition;  i.e., the second  half  of  1993  vs.  1992.
Acquisition  activity, which includes only the  results  for  the
first  half  of 1993 for Gamesa and Hostess Frito-Lay,  did  not,
however, significantly affect the full year international  profit
comparison,  as  losses at Gamesa offset profits  contributed  by
Hostess Frito-Lay and other smaller acquisitions.  Gamesa  posted
a profit for the full year despite the first half loss.

                           Restaurants

Management's Analysis

See  Management's  Analysis - Overview on page 7  for  background
information  and discussion of the fifty-third week in  1994  and
Business  Segments on page F-9 for detailed results.   Net  sales
and  operating profits within this discussion include the  impact
of  the  fifty-third week while same store sales growth has  been
adjusted  to  exclude  its impact.  Also, for  purposes  of  this
analysis,  the net sales and operating profits of the  franchisee
operations  of PFS, PepsiCo's restaurant distribution  operation,
have been allocated to each restaurant chain.
                                
     1994 vs. 1993

      Worldwide net sales increased $1.2 billion or 12% to  $10.5
billion.  The fifty-third week contributed approximately 1  point
to  the  sales growth with domestic and international  operations
benefiting  by  about  1 point and 2 points,  respectively.   The
sales  growth  was primarily due to $934 million from  additional
units   (units   constructed  and  acquired,   principally   from
franchisees, net of units closed and sold) and volume  growth  of
$185  million.  Domestic sales increased $668 million  or  8%  to
$8.7 billion and international sales rose $497 million or 37%  to
$1.8 billion.

 23

      Worldwide operating profits declined $48 million or  6%  to
$730  million.  The fifty-third week mitigated the profit decline
by   approximately  3  points  with  domestic  and  international
operations  benefiting at the same rate.  The  decline  reflected
increased  administrative and support costs,  including  spending
for  strategic  initiatives  and  aggressive  international  unit
development, higher store operating costs and a sales  mix  shift
to   lower-margin  products.   These  were  partially  offset  by
additional units that contributed $73 million, lower raw material
costs  and  higher franchise royalty revenues.  Volume growth  of
$30  million  was  offset by lower net prices.  Domestic  profits
declined  $26  million  or  4%  to $659  million.   International
profits fell $22 million or 23% to $71 million, which included  a
$7  million charge to consolidate the headquarters operations for
the three international restaurant businesses into one.

     The significant devaluation of the Mexican peso in late 1994
and  early  1995  did  not materially impact  1994  international
restaurant operating profits.  Results from Mexico constitute  an
immaterial portion of international restaurant profits.  However,
the  devaluation and its related effects are expected to have  an
unfavorable  impact  on 1995 results.  The operations  in  Mexico
have  begun  to  increase  pricing and  reduce  costs,  including
evaluating  alternative sourcing of raw materials.  In  addition,
further  expansion  of company-owned units has  been  temporarily
halted   pending  stabilization  of  the  economy.   Nonetheless,
significant uncertainties remain in Mexico and, as a  result,  it
is not possible to quantify the impact.

      Late  in  1994,  Roger Enrico was named  Chairman,  PepsiCo
Worldwide  Restaurants.   He  is  currently  evaluating   several
options to improve their operating results and  returns  on  our
total   restaurant  investments.   Examples  of   options   under
consideration  to  improve investment returns include  a  reduced
company  share of future new restaurant development and  sale  of
some  existing  company  restaurants to  franchisees.   The  cash
generated  from these options would most likely be reinvested  in
our nonrestaurant businesses or used to repurchase PepsiCo stock.
We  expect  to  begin  making decisions on  these  and  other
options  during  1995  as we continue to refine our restaurant 
operating strategies.

Pizza Hut

     Worldwide sales increased $346 million or 8% to $4.5 billion
driven   by  international  operations.   However,  the  domestic
operations  continue to represent the major portion of  worldwide
Pizza Hut.  The worldwide sales increase was driven by additional
units  that contributed $460 million, including $80 million  from
the domestic acquisition of D'Angelo Sandwich Shops late in 1993.
This  benefit  was  partially offset  by  lower  volumes  of  $60
million,   reflecting  domestic  volume  declines  that  exceeded
international volume gains, and lower net pricing.  The  domestic
volume   declines  primarily  reflected  lapping  the  successful
national roll-out of Bigfoot Pizza in 1993.

      Same  store sales for domestic company-owned units declined
6%,  though  volume  decreased at a slightly  slower  rate.   The
decline  was  primarily  in the delivery and  carryout  channels,
reflecting the lapping of the national roll-out of Bigfoot  Pizza
in 1993.

      Worldwide  profits decreased $77 million  or  21%  to  $295
million.   This  decline reflected the lower net pricing  due  to
value-oriented promotions, increased administrative  and  support
spending,  primarily  to  develop  international  markets,  lower
volumes  of $35 million, reflecting the domestic volume  declines
partially offset by the international volume advances, and higher
store operating costs.  These were partially offset by additional
units  that contributed $27 million, increased franchise  royalty
revenues  and  favorable  food costs, as slightly  higher  cheese
prices  were  more than offset by favorable meat  costs.   Though
difficult to forecast, these food costs are expected to  decrease
in  1995.   The profit decline was also mitigated by a  favorable
impact of $14 million from extending depreciable lives on certain
domestic  delivery assets and the absence of last year's start-up
costs associated with Bigfoot Pizza.  The worldwide profit margin
declined more than 2 points to 6.6%.

     International sales posted strong double-digit growth driven
by  additional  units,  particularly in  Korea,  Brazil,  Canada,
Mexico  and Spain.  Volume gains were partially offset  by  lower
net  pricing.  International profits declined sharply, reflecting
increased start-up and administrative costs to support aggressive
development strategies, 

 24

partially offset by additional units  and increased franchise royalty 
revenues.  International profits also reflected  Pizza  Hut's  share of 
the international  restaurants'consolidation charge.

      Strong gains in Korea, the largest profit market, primarily
reflected  additional  units and strong volume  growth.   Profits
declined  in  the  largest sales markets, Australia  and  Canada.
Additionally, significant start-up losses were experienced in the
new Poland operations.

Taco Bell

      Worldwide  sales  increased $500 million  or  17%  to  $3.4
billion.  The domestic operations represent substantially all  of
worldwide  Taco  Bell.  The worldwide sales  growth  was  led  by
additional  Taco  Bell units which contributed $281  million  and
volume  gains that provided $125 million, half of which  was  the
result  of  food and paper sales to additional franchisees.   The
sales growth also reflected $84 million due to the acquisition of
Chevys  in the third quarter of 1993 and new Chevys units.   Same
store  sales for domestic company-owned Taco Bell units grew  2%,
though volume grew at a slower rate.

      Worldwide  profits rose $17 million or 7% to $270  million.
The  profit  growth reflected lower food costs, additional  units
which  contributed  $24  million, volume gains  of  $20  million,
higher   soft  drink  prices  and  increased  franchise   royalty
revenues.   These benefits were partially offset by higher  store
operating  costs, driven by increased labor costs, an unfavorable
mix  shift  to  lower-margin  products  and  higher  headquarters
administrative  expenses.   Profit  growth  was   restrained   by
increased  losses  posted  by Hot 'n Now.   Taco  Bell  plans  to
transition  Hot  'n  Now during 1995 from  primarily  a  company-
operated  to  a licensee/franchisee-operated business.   This  is
expected to significantly reduce Hot 'n Now's operating losses in
1995.   Taco Bell worldwide profit margin fell almost 1 point  to
7.9%.

      International  operations posted strong double-digit  sales
growth,  principally due to additional units.  Volume gains  were
largely offset by an unfavorable currency translation impact of a
weaker Canadian dollar.  International operating results improved
slightly, although still resulting in a modest loss in  1994,  as
volume  gains  were partially offset by start-up  losses  of  new
units.

KFC

      Worldwide  sales rose $319 million or 14% to $2.6  billion.
The sales growth reflected additional units that contributed $193
million and volume gains of $120 million.

      Worldwide  profits  increased $12 million  or  8%  to  $165
million,  reflecting  the absence of last year's  start-up  costs
associated  with  the Colonel's Rotisserie Gold  roasted  chicken
product   and  accompanying  side  items  (collectively,  "CRG").
Higher  volumes of $40 million, additional units that contributed
$22 million and increased franchise royalty revenues were largely
offset  by  a  sales mix shift to lower-margin  products,  higher
field and headquarters administrative and support costs and lower
net  pricing.  The worldwide profit margin declined  almost  one-
half point to 6.2% due to international operations.

      The  improvement  in  KFC's  domestic  sales  reflected  an
increase in volume, as gains from CRG and the value-oriented Mega
Meal were partially offset by lower volumes of existing products,
and  higher net pricing.  Same store sales advanced 2% from  last
year, though volumes grew at a slightly slower rate.

      Domestic  profits  grew  at a double-digit  rate  in  1994.
Operating profit benefited from the absence of last year's start-
up  costs  associated with CRG.  Higher net  pricing  and  volume
gains were offset by a mix shift to the lower-margin CRG and Mega
Meal  offerings.  Reduced store operating costs, including  lower
product costs, primarily due to reformulation of side items  late
in the second quarter, and the 1994 impact of favorable actuarial
adjustments  to prior year workers' compensation claim  accruals,
were  partially offset by increased administrative costs.  Profit
growth   was  depressed  by  lapping  last  year's  $3.3  million
favorable adjustment to a 1991 reorganization accrual.

 25

      Double-digit  international sales growth  was  led  by  the
combined  impact of acquired units in the U.K. and new  units  in
Mexico,  Australia and Canada.  The balance of the  sales  growth
reflected   volume  gains  due,  in  part,  to  new  value-priced
offerings, partially offset by the related lower net pricing.

      International  profit growth was modest.   Excluding  KFC's
share  of  the  international restaurants' consolidation  charge,
strong   single-digit  international  operating   profit   growth
reflected  gains  from  additional  units  and  higher  franchise
royalty  revenues, partially offset by increased store  operating
costs  and  higher field administrative and support  costs.   The
volume gains were offset by the lower net pricing.

      Profits increased in Australia, the largest market, and New
Zealand.   Mexico's profits declined sharply and Canada  reported
significantly lower results.

     International sales represented about 40% of worldwide sales
in 1994 and 30% in 1993.  International profits represented about
40% of worldwide profits in 1994 and 1993.

     1993 vs. 1992

      Worldwide  net  sales  rose $1.1 billion  or  14%  to  $9.4
billion.   This  advance  was driven by additional  units,  which
contributed  $913 million.  Volume growth, led by domestic  Pizza
Hut,  provided $175 million of the sales advance.  Domestic sales
grew  $910 million or 13% to $8.0 billion and international sales
rose  $213  million  or  19%  to $1.4 billion.   The  unfavorable
currency  translation impact of a stronger U.S. dollar  depressed
international sales growth.

      Worldwide operating profits grew $60 million or 8% to  $778
million.  Additional units provided $89 million and volume growth
contributed  $75  million  to  the  profit  increase.   Increased
operating  costs  were partially offset by  modestly  higher  net
pricing  (principally  at domestic KFC) and  increased  franchise
royalty  revenues.  Domestic profits rose $87 million or  15%  to
$685 million, while international profits declined $27 million or
23% to $93 million reflecting weakness in Australia.

Pizza Hut

      Worldwide  sales  increased $525 million  or  15%  to  $4.2
billion.  The domestic operations represent the major portion  of
worldwide  Pizza Hut.  Additional units contributed $392  million
to  the  worldwide sales increase.  Volume growth  provided  $140
million,  driven  by  strong domestic gains  resulting  from  the
national  roll-out of the new value-priced Bigfoot Pizza  in  the
second quarter.

      Same  store  sales  advanced 5% though  volume  growth  was
slightly higher.  This performance reflected growth in all  three
distribution channels: delivery, carryout and dine-in.   Improved
sales in both delivery and carryout were driven by the success of
Bigfoot.  The growth in dine-in reflected the impact of the third
quarter  1992  roll-out of the all-you-can-eat  pizza  and  salad
lunch buffet.  Results late in 1993 indicated a softening of same
store  sales  trends  in dine-in due primarily  to  lapping  last
year's roll-out of the lunch buffet.

      Worldwide  profits  advanced $37 million  or  11%  to  $372
million.   This  profit performance reflected  $55  million  from
volume  growth,  $41  million  from additional  units,  increased
franchise royalty revenues and higher international net  pricing.
These benefits were partially offset by increased store operating
costs  as  well  as  administrative and support  expenses,  which
included  the  start-up costs associated with  Bigfoot.   Bigfoot
contributed  significantly to U.S. profit growth  as  incremental
volume, net of estimated cannibalization of other products,  more
than  offset  the effect of the product's lower  margin  and  the
start-up  costs.  Prices for cheese have fluctuated significantly
in  recent  years.   Lower cheese costs in 1993  were  offset  by
higher  meat  and produce costs.  The effect of these  increasing
costs was exacerbated by a sales mix shift to more heavily-topped
pizzas  and  the  lunch  buffet.  Though difficult  to  forecast,
commodity  costs (led by cheese) were expected to increase.   The
worldwide  profit margin declined almost one-half point  to  9.0%
due to lower international profits.


 26

      International  sales posted double-digit growth  driven  by
additional  units in several markets, including Canada,  Belgium,
Australia,  Spain and Puerto Rico.  This benefit,  combined  with
higher net pricing and increased franchise royalty revenues,  was
partially  offset by an unfavorable currency translation  impact,
principally  in  Australia  and  Canada.   International  profits
declined  slightly, primarily reflecting an unfavorable  currency
translation  impact.  The contributions of the additional  units,
higher net pricing and increased franchise royalty revenues  were
largely   offset   by  higher  operating  expenses,   principally
development and support costs.

     In the largest sales markets, profits declined in Australia,
but  rose  in  Canada.  Australia's performance  reflected  lower
volumes,  despite  introduction of Bigfoot  Pizza  in  the  third
quarter,  and intense competitive pricing activity.   To  provide
even  greater value and stimulate volume growth in 1994,  a  more
heavily-topped  Bigfoot was relaunched late in  1993  and  a  new
value-oriented  menu  was  introduced.   Canada's  profit  growth
reflected higher net pricing, additional units and volume growth.
A  product  similar  to Bigfoot, launched in the  third  quarter,
contributed to improved results.

Taco Bell

      Worldwide  sales grew $441 million or 18% to $2.9  billion.
The  domestic operations represent substantially all of worldwide
Taco Bell.  The worldwide sales increase was driven by additional
units, which contributed $364 million, including $78 million from
additional  Hot 'n Now units and the acquired Chevys units.   The
balance of the sales growth reflected the impact of higher  store
volumes,  partially  offset by lower distribution  sales  by  PFS
caused by the late 1992/early 1993 switch to another supplier  by
certain  franchisees.  Same store sales for Taco Bell units  rose
6% due to volume growth.

      Worldwide  profits increased $39 million  or  18%  to  $253
million.   Additional units contributed $35  million  and  volume
growth  provided  $25  million.  These  benefits,  combined  with
higher franchise royalty revenues and a small decline in food and
promotional   costs,   were   partially   offset   by   increased
headquarters administrative and support expenses.  Profit  growth
was depressed by increased losses at Hot 'n Now, reflecting costs
associated with a decision to not develop certain sites  as  well
as  losses at new units.  The worldwide profit margin was even at
8.7%.   Profits in 1994 were expected to be aided by a late  1993
price increase for certain soft drink sizes.

      International operations posted double-digit  sales  growth
and  a  small loss compared to a small profit in 1992, reflecting
increased  development  and  support  costs,  as  well  as  costs
associated with a store closure in the U.K.

KFC

      Worldwide  sales rose $157 million or 7% to  $2.3  billion.
Additional   units,   principally   in   international   markets,
contributed  $158 million to sales growth.  Higher  domestic  net
pricing and increased franchise royalty revenues also aided sales
growth.   Sales  growth was depressed by an unfavorable  currency
translation impact as well as lower store volumes.

      Worldwide  profits  decreased $16 million  or  9%  to  $153
million  as lower international profits were partially offset  by
an increase domestically.  The worldwide profit decline reflected
higher  store  operating  costs, which  included  start-up  costs
associated with the roll-out of the new roasted chicken  products
in   the   U.S.   and  Australia,  and  increased   international
administrative  and  support expenses, partially  offset  by  the
higher net pricing and increased franchise royalty revenues.  The
contribution  from additional units of $13 million was  partially
offset  by  the  impact of lower volumes.  The  worldwide  profit
margin  fell  over  1  point to 6.6% due to  lower  international
profits.

     Improvement in domestic sales reflected additional units and
higher  net  pricing,  principally from a lower  level  of  price
discounting, partially offset by lower store volumes.  Same store
sales  were  about even with last year. The introduction  of  CRG
late  in the year contributed significantly to strong same  store
sales growth in the fourth quarter of 1993.


 27

     Domestic profits grew at a high single-digit rate reflecting
the  higher  net pricing that exceeded increased store  operating
costs. This benefit, combined with the impact of additional units
and  higher franchise royalty revenues, was partially  offset  by
the  effect  of  lower  volumes.   The  profit  performance  also
reflected  a  favorable  adjustment of  the  1991   restructuring
accrual.   For the year, the benefits from incremental volume  of
CRG,  net  of  estimated cannibalization of other products,  were
more  than  offset by the effect of CRG's lower  margin  and  the
start-up  expenses  for the roll-out.  However,  CRG  contributed
significantly to profit growth in the fourth quarter of 1993.

      International sales posted double-digit growth,  driven  by
additional  units  in  Singapore, Canada  and  Mexico,  partially
offset  by an unfavorable currency translation impact.  A double-
digit decline in profits was caused principally by Australia, the
largest sales market.  Increased administrative and support costs
also contributed to the profit decline.

      Australia's  performance  was  depressed  by  the  start-up
expenses associated with its new value-priced TenderRoast chicken
product,  the combined impact of the product's lower  margin  and
its  greater than expected cannibalization of other higher-margin
products  and  an  overall decline in volumes.  Initiatives  were
underway to drive incremental sales of TenderRoast.  Canada,  the
next largest sales market, posted a relatively modest decline  in
profits   reflecting   lower  volumes  and  competitive   pricing
activity.   To  improve results in 1994 for  both  Australia  and
Canada,  KFC introduced new value-oriented menus and  rolled  out
delivery in certain markets.

     International sales represented about 30% of worldwide sales
in  1993 and 1992. International profits represented about 40% of
worldwide profits in 1993 and 50% in 1992.

Item 8. Financial Statements and Supplementary Data

     See Index to Financial Information on page F-1.

Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure

     Not applicable.
                                
                                
                            PART III

Item 10.  Directors and Executive Officers of the Registrant

      The  name,  age  and background of each  of  the  Company's
directors  nominated  for  reelection  are  contained  under  the
caption  "Election of Directors" in the Company's Proxy Statement
for  its 1995 Annual Meeting of Shareholders and are incorporated
herein by reference.

      The  executive  officers of the Company and  their  current
positions and ages are as follows:


NAME                 POSITION                             AGE
                                                            
D. Wayne Calloway    Chairman of the Board and Chief       59
                     Executive Officer
                                                            
Roger A. Enrico      Vice Chairman of the Board and         
                     Chairman and Chief Executive          50
                     Officer, PepsiCo Worldwide
                     Restaurants
                                                            
Robert G. Dettmer    Executive Vice President and Chief    63
                     Financial Officer
                                                            
Randall C. Barnes    Senior Vice President and Treasurer   43
                                                            
Robert L. Carleton   Senior Vice President and             54
                     Controller

 28


                                                            
Edward V. Lahey,     Senior Vice President, General        56
Jr.                  Counsel and Secretary
                                                            
Indra K. Nooyi       Senior  Vice  President,  Strategic   39
                     Planning
                                                            

      Executive  officers are elected by the Company's  Board  of
Directors,  and  their terms of office continue  until  the  next
annual meeting of the Board or until their successors are elected
and  have qualified.  There are no family relationships among the
Company's executive officers.

Item 11.  Executive Compensation

      Information on compensation of the Company's directors  and
executive  officers is contained in the Company's Proxy Statement
for  its  1995 Annual Meeting of Shareholders under  the  caption
"Executive Compensation" and is incorporated herein by reference.

Item  12.   Security Ownership of Certain Beneficial  Owners  and
Management

     Information on the number of shares of PepsiCo Capital Stock
beneficially  owned  by each director and by  all  directors  and
officers as a group is contained under the caption "Ownership  of
Capital  Stock by Directors and Officers" in the Company's  Proxy
Statement  for  its  1995 Annual Meeting of Shareholders  and  is
incorporated  herein by reference.  As far as  is  known  to  the
Company,  no  person  owns  beneficially  more  than  5%  of  the
outstanding shares of PepsiCo Capital Stock.

Item 13.  Certain Relationships and Related Transactions

     Not applicable.

                             PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports  on
Form 8-K

     (a)  1.   Financial Statements

                   See Index to Financial Information on page F-1.

          2.   Financial Statement Schedules

                    See Index to Financial Information on page F-1.

          3.   Exhibits

                    See Index to Exhibits on page E-1.

     (b)  Reports on Form 8-K

          None.


 S-1

                           SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, PepsiCo has duly caused this report  to  be
signed   on  its  behalf  by  the  undersigned,  thereunto   duly
authorized.

Dated:  March 28, 1995


                         PEPSICO, INC.


                    By:  /s/ EDWARD V. LAHEY, JR.
                         Edward V. Lahey, Jr.
                         Attorney-in-Fact


      Pursuant to the requirements of the Securities Exchange Act
of  1934,  this  report has been signed below  by  the  following
persons  on  behalf of PepsiCo and in the capacities and  on  the
date indicated.

      SIGNATURE                TITLE                       DATE


                                                     
/s/ D. WAYNE CALLOWAY         Chairman of the Board and   March 28, 1995
D. Wayne Calloway             Chief Executive Officer
                                                     
                                                     
/s/ ROBERT G. DETTMER         Executive Vice President    March 28, 1995
Robert G. Dettmer             and Chief Financial
                              Officer
                                                     
                                                     
/s/ ROBERT L. CARLETON        Senior Vice President and   March 28, 1995
Robert L. Carleton            Controller (Chief
                              Accounting Officer)
                                                     
                                                     
/s/ ROGER A. ENRICO           Vice Chairman of the         March 28, 1995
Roger A. Enrico               Board, Chairman and Chief
                              Executive Officer, PepsiCo
                              Worldwide Restaurants, and
                              Director
                                                     
                                                     
/s/ JOHN F. AKERS             Director                    March 28, 1995
John F. Akers
                                                     
                                                     
/s/ ROBERT E. ALLEN           Director                    March 28, 1995
Robert E. Allen
                                                     
                                                     
/s/ JOHN J. MURPHY            Director                    March 28, 1995
John J. Murphy
                                                     
                                                     
/s/ ANDRALL E. PEARSON        Director                    March 28, 1995
Andrall E. Pearson
                                                     

 S-2
                                                     
/s/ SHARON PERCY              Director                    March 28, 1995
ROCKEFELLER
Sharon Percy Rockefeller
                                                     
                                                     
/s/ ROGER B. SMITH            Director                    March 28, 1995
Roger B. Smith
                                                     
                                                     
/s/ ROBERT H. STEWART, III    Director                    March 28, 1995
Robert H. Stewart, III
                                                     
                                                     
/s/ FRANKLIN A. THOMAS        Director                    March 28, 1995
Franklin A. Thomas
                                                     
                                                     
/s/ P. ROY VAGELOS            Director                    March 28, 1995
P. Roy Vagelos
                                                     
                                                     
/s/ ARNOLD WEBER              Director                    March 28, 1995
Arnold R. Weber

                                     
                                     
                                     
                                     
                      PepsiCo, Inc. and Subsidiaries
                                     
                                     
                                     
                           FINANCIAL INFORMATION
                                     
                                     
                                     
                FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
                                     
                                     
                                     
                    FISCAL YEAR ENDED DECEMBER 31, 1994
                                     
 F-1
                                     
                      PEPSICO, INC. AND SUBSIDIARIES
                                     
                      INDEX TO FINANCIAL INFORMATION
                             Item 14(a)(1)-(2)
                                     
                                     
                                                               Page
                                                            Reference
Item 14(a)(1) Financial Statements

Consolidated Statement of Income for
  the fiscal years December 31, 1994,
  December 25, 1993 and December 26, 1992                        F-2
Consolidated Balance Sheet at December 31, 1994
  and December 25, 1993                                          F-3
Consolidated Statement of Cash Flows for
  the fiscal years ended December 31, 1994,
  December 25, 1993 and December 26, 1992                        F-4
Consolidated Statement of Shareholders' Equity
  for the fiscal years ended December 31, 1994,
  December 25, 1993 and December 26, 1992                        F-6
Notes to Consolidated Financial
  Statements                                                     F-8
Management's Responsibility for Financial Statements             F-37
Report of Independent Auditors, KPMG Peat Marwick LLP            F-38
Selected Quarterly Financial Data                                F-39
Selected Financial Data                                          F-42

Item 14(a)(2) Financial Statement Schedules

     II   Valuation and Qualifying Accounts and Reserves
          for the fiscal years ended December 31, 1994,
          December 25, 1993 and December 26, 1992                F-49



All  other  financial statements and schedules have been omitted since  the
required information is not present or not present in amounts sufficient to
require submission of the schedule, or because the information required  is
included in the above listed financial statements or the notes thereto.

 F-2
_______________________________________________________________________________
Consolidated Statement of Income
(in millions except per share amounts)
PepsiCo, Inc. and Subsidiaries
Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended
 December 25, 1993 and December 26, 1992
                                              1994       1993         1992
_______________________________________________________________________________
Net Sales                                $28,472.4  $25,020.7    $21,970.0
Costs and Expenses, net
Cost of sales                             13,715.4   11,946.1     10,611.7
Selling, general and
 administrative expenses                  11,243.6    9,864.4      8,721.2
Amortization of intangible assets            312.2      303.7        265.9
Operating Profit                           3,201.2    2,906.5      2,371.2

Gain on joint venture stock offering          17.8          -            -
Interest expense                            (645.0)    (572.7)      (586.1)
Interest income                               90.4       88.7        113.7

Income Before Income Taxes and Cumulative
  Effect of Accounting Changes             2,664.4    2,422.5      1,898.8

Provision for Income Taxes                   880.4      834.6        597.1

Income Before Cumulative Effect of
  Accounting Changes                       1,784.0    1,587.9      1,301.7

Cumulative Effect of Accounting Changes
Postemployment benefits (net of income
 tax benefit of $29.3)                       (55.3)         -            -
Pension assets (net of income tax
 expense of $14.5)                            23.3          -            -
Postretirement benefits other than
 pensions (net of income tax benefit
 of $218.6)                                      -          -       (356.7)
Income taxes                                     -          -       (570.7)

Net Income                               $ 1,752.0  $ 1,587.9    $   374.3

Income (Charge) Per Share
Before cumulative effect of accounting
 changes                                 $    2.22  $    1.96    $    1.61
Cumulative effect of accounting changes
 Postemployment benefits                     (0.07)         -            -
 Pension assets                               0.03          -            -
 Postretirement benefits other
  than pensions                                  -          -        (0.44)
 Income taxes                                    -          -        (0.71)

Net Income Per Share                     $   2.18   $    1.96    $    0.46

Average shares outstanding used to calculate
 income (charge) per share                  803.6       810.1        806.7
_______________________________________________________________________________
See accompanying Notes to Consolidated Financial Statements.
_______________________________________________________________________________

 F-3
_____________________________________________________________________________
Consolidated Balance Sheet
(in millions except per share amount)
PepsiCo, Inc. and Subsidiaries
December 31, 1994 and December 25, 1993
                                                       1994        1993
_____________________________________________________________________________
ASSETS
Current Assets
Cash and cash equivalents                         $   330.7   $   226.9
Short-term investments, at cost                     1,157.4     1,573.8

                                                    1,488.1     1,800.7
Accounts and notes receivable, less allowance:
  $150.6 in 1994 and $128.3 in 1993                 2,050.9     1,883.4
Inventories                                           970.0       924.7
Prepaid expenses, taxes and
 other current assets                                 563.2       499.8

     Total Current Assets                           5,072.2     5,108.6

Investments in Affiliates                           1,295.2     1,090.5
Property, Plant and Equipment, net                  9,882.8     8,855.6
Intangible Assets, net                              7,842.1     7,929.5
Other Assets                                          699.7       721.6
       Total Assets                               $24,792.0   $23,705.8

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts payable                                  $ 1,451.6   $ 1,390.0
Accrued compensation and benefits                     753.5       726.0
Short-term borrowings                                 678.5     2,191.2
Income taxes payable                                  671.7       823.7
Accrued marketing                                     546.2       400.9
Other current liabilities                           1,168.9     1,043.1

     Total Current Liabilities                      5,270.4     6,574.9

Long-term Debt                                      8,840.5     7,442.6
Other Liabilities                                   1,852.1     1,342.0
Deferred Income Taxes                               1,972.9     2,007.6

Shareholders' Equity
Capital stock, par value 1 2/3 cents per share:
 authorized 1,800.0 shares, issued 863.1 shares        14.4        14.4
Capital in excess of par value                        934.4       879.5
Retained earnings                                   7,739.1     6,541.9
Currency translation adjustment and other            (470.6)     (183.9)

                                                    8,217.3     7,251.9
Less:  Treasury stock, at cost:
  73.2 shares and 64.3 shares in 1994 and
   1993, respectively                              (1,361.2)     (913.2)
     Total Shareholders' Equity                     6,856.1     6,338.7
       Total Liabilities and
        Shareholders' Equity                      $24,792.0   $23,705.8

____________________________________________________________________________
See accompanying Notes to Consolidated Financial Statements.
_____________________________________________________________________________

 F-4

___________________________________________________________________________
Consolidated Statement of Cash Flows (page 1 of 2)
(in millions)
PepsiCo, Inc. and Subsidiaries
Fifty-three weeks ended December 31, 1994 and fifty-two weeks
 ended December 25, 1993 and December 26, 1992

                                             1994        1993       1992
___________________________________________________________________________
Cash Flows - Operating Activities
Income before cumulative effect of
 accounting changes                     $ 1,784.0   $ 1,587.9  $ 1,301.7
Adjustments to reconcile income
 before cumulative effect of
 accounting changes to net cash
 provided by operating activities:
  Depreciation and amortization           1,576.5     1,444.2    1,214.9
  Deferred income taxes                     (66.9)       83.3      (52.0)
  Other noncash charges and
   credits, net                             391.1       344.8      315.6
Changes in operating working capital,
 excluding effects of acquisitions:
  Accounts and notes receivable            (111.8)     (161.0)     (45.7)
  Inventories                              (101.6)      (89.5)     (11.8)
  Prepaid expenses, taxes and other
    current assets                            1.2         3.3      (27.4)
  Accounts payable                           30.4       143.2     (102.0)
  Income taxes payable                       54.4      (125.1)     (16.9)
  Other current liabilities                 158.7       (96.7)     135.2
Net change in operating
 working capital                             31.3      (325.8)     (68.6)
Net Cash Provided by Operating
 Activities                               3,716.0     3,134.4    2,711.6

Cash Flows - Investing Activities
Acquisitions and investments
 in affiliates                             (315.8)   (1,011.2)  (1,209.7)
Capital spending                         (2,253.2)   (1,981.6)  (1,549.6)
Proceeds from sales of property,
 plant and equipment                         55.3        72.5       89.0
Short-term investments, by original
 maturity:
  More than three months-purchases         (218.6)     (578.7)  (1,174.8)
  More than three months-maturities         649.5       846.0    1,371.8
  Three months or less, net                  (9.9)       (8.3)    (249.4)
Other, net                                 (268.3)     (109.4)     (30.8)

Net Cash Used for Investing
 Activities                             $(2,361.0)  $(2,770.7) $(2,753.5)

____________________________________________________________________________
(Continued on following page)

 F-5
___________________________________________________________________________
Consolidated Statement of Cash Flows (page 2 of 2)
(in millions)
PepsiCo, Inc. and Subsidiaries
Fifty-three weeks ended December 31, 1994 and fifty-two weeks
 ended December 25, 1993 and December 26, 1992

                                             1994       1993       1992
___________________________________________________________________________
Cash Flows - Financing Activities
Proceeds from issuances of
 long-term debt                         $ 1,285.2   $   710.8  $ 1,092.7
Payments of long-term debt               (1,179.5)   (1,201.9)    (616.3)
Short-term borrowings, by original
 maturity:
   More than three months-proceeds        1,303.8     3,033.6      911.2
   More than three months-payments       (1,727.7)   (2,791.6)  (2,062.6)
   Three months or less, net                113.8       839.0    1,075.3
Cash dividends paid                        (540.2)     (461.6)    (395.5)
Purchases of treasury stock                (549.1)     (463.5)     (32.0)
Proceeds from exercises of
 stock options                               97.4        68.6       82.8
Other, net                                  (43.5)      (36.7)     (30.9)
Net Cash (Used for) Provided by
 Financing Activities                    (1,239.8)     (303.3)      24.7

Effect of Exchange Rate Changes on
 Cash and Cash Equivalents                  (11.4)       (3.4)       0.4

Net Increase (Decrease) in Cash
 and Cash Equivalents                       103.8        57.0      (16.8)
Cash and Cash Equivalents
 - Beginning of Year                        226.9       169.9      186.7

Cash and Cash Equivalents
 - End of Year                          $   330.7   $   226.9  $   169.9
___________________________________________________________________________
Supplemental Cash Flow Information
  Cash Flow Data
   Interest paid                        $   591.1       549.5      574.7
   Income taxes paid                    $   663.1       675.6      519.7
  Schedule of Noncash Investing
   and Financing Activities
   Liabilities assumed in
    connection with acquisitions        $   223.5       897.0      383.8
   Issuance of treasury stock and
    debt for acquisitions               $    38.8       364.5      189.5
   Book value of net assets exchanged
    for investment in affiliates        $       -        60.8       86.7
___________________________________________________________________________
See accompanying Notes to Consolidated Financial Statements.

 F-6
___________________________________________________________________________


Consolidated Statement of Shareholders' Equity (page 1 of 2)
(in millions except per share amounts)
PepsiCo, Inc. and Subsidiaries
Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended
 December 25, 1993 and December 26, 1992
                                               Capital Stock
                                         Issued           Treasury
                                    Shares    Amount Shares      Amount

Shareholders' Equity,
 December 28, 1991                  863.1      $14.4 (74.0)    $  (745.9)
1992 Net income                         -          -     -             -
 Cash dividends declared
  (per share-$0.51)                     -          -     -             -
 Currency translation adjustment        -          -     -             -
 Shares issued in connection with
  acquisitions                          -          -   4.3          44.2
 Stock option exercises, including
  tax benefits of $57.5                 -          -   6.3          65.3
 Purchases of treasury stock            -          -  (1.0)        (32.0)
 Other                                  -          -   0.1           1.4
Shareholders' Equity,
 December 26, 1992                  863.1      $14.4 (64.3)    $  (667.0)
1993 Net income                         -          -     -             -
 Cash dividends declared
  (per share-$0.61)                     -          -     -             -
 Currency translation adjustment        -          -     -             -
 Purchases of treasury stock            -          - (12.4)       (463.5)
 Shares issued in connection with
  acquisitions                          -          -   8.9         170.2
 Stock option exercises, including
  tax benefits of $23.4                 -          -   3.4          46.0
 Pension liability adjustment, net
  of deferred taxes of $5.1             -          -     -             -
 Other                                  -          -   0.1           1.1
Shareholders' Equity,
 December 25, 1993                  863.1      $14.4 (64.3)    $  (913.2)
1994 Net income                         -          -     -             -
 Cash dividends declared
  (per share-$0.70)                     -          -     -            -
 Currency translation adjustment        -          -     -            -
 Purchases of treasury stock            -          - (15.0)       (549.1)
 Stock option exercises, including
  tax benefits of $27.1                 -          -   4.9          80.8
 Shares issued in connection with
  acquisitions                          -          -   0.9          15.1
 Pension liability adjustment, net
  of deferred taxes of $5.1             -          -     -             -
 Other                                  -          -   0.3           5.2
Shareholders' Equity,
 December 31, 1994                  863.1      $14.4 (73.2)    $(1,361.2)

(Continued on following page)

 F-7

Consolidated Statement of Shareholders' Equity (page 2 of 2)
(in millions except per share amounts)
PepsiCo, Inc. and Subsidiaries
Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended
 December 25, 1993 and December 26, 1992
                                 Capital              Currency
                                   in                 Translation
                                 Excess of  Retained  Adjustment
                                 Par Value  Earnings  and Other   Total

Shareholders' Equity,
 December 28, 1991                  $476.6   $5,470.0  $ 330.3   $5,545.4
1992 Net income                          -      374.3        -      374.3
 Cash dividends declared
  (per share-$0.51)                      -     (404.6)       -     (404.6)
 Currency translation adjustment         -          -   (429.3)    (429.3)
 Shares issued in connection with
  acquisitions                       115.3          -        -      159.5
 Stock option exercises, including
  tax benefits of $57.5               74.9          -        -      140.2
 Purchases of treasury stock             -          -        -      (32.0)
 Other                                 0.8          -        -        2.2
Shareholders' Equity,
 December 26, 1992                  $667.6   $5,439.7  $ (99.0)  $5,355.7
1993 Net income                          -    1,587.9        -    1,587.9
 Cash dividends declared
  (per share-$0.61)                      -     (485.7)       -     (485.7)
 Currency translation adjustment         -          -    (77.0)     (77.0)
 Purchases of treasury stock             -          -        -     (463.5)
 Shares issued in connection with
  acquisitions                       164.6          -        -      334.8
 Stock option exercises, including
  tax benefits of $23.4               46.1          -        -       92.1
 Pension liability adjustment, net
  of deferred taxes of $5.1              -          -     (7.9)      (7.9)
 Other                                 1.2          -        -        2.3
Shareholders' Equity,
 December 25, 1993                  $879.5   $6,541.9  $(183.9)  $6,338.7
1994 Net income                          -    1,752.0        -    1,752.0
 Cash dividends declared
  (per share-$0.70)                      -     (554.8)       -     (554.8)
 Currency translation adjustment         -          -   (294.6)    (294.6)
 Purchases of treasury stock             -          -        -     (549.1)
 Stock option exercises, including
  tax benefits of $27.1               44.5          -        -      125.3
 Shares issued in connection with
  acquisitions                        13.7          -        -       28.8
 Pension liability adjustment, net
  of deferred taxes of $5.1              -          -      7.9        7.9
 Other                                (3.3)         -        -        1.9
Shareholders' Equity,
 December 31, 1994                  $934.4   $7,739.1  $(470.6)  $6,856.1

See accompanying Notes to Consolidated Financial Statements.

 F-8

Notes to Consolidated Financial Statements
(tabular dollars in millions except per share amounts)

Note 1 - Summary of Significant Accounting Policies

The preparation of the Consolidated Financial Statements requires estimates
and assumptions that affect amounts reported and disclosed in the financial
statements  and  related  notes.  Actual results could  differ  from  those
estimates.   Certain reclassifications were made to prior year  amounts  to
conform  with  the 1994 presentation.  Significant accounting policies  are
discussed below, or where applicable, in the Notes that follow.
      Principles  of Consolidation.  The financial statements  reflect  the
consolidated  accounts  of  PepsiCo, Inc. and  its  controlled  affiliates.
Intercompany  accounts and transactions have been eliminated.   Investments
in  affiliates  in  which PepsiCo exercises significant influence  but  not
control are accounted for by the equity method and the equity in net income
is included in Selling, general and administrative expenses.
     Marketing Costs.  Marketing costs are reported in Selling, general and
administrative  expenses  and include costs of advertising,  marketing  and
promotional  programs.  Promotional discounts are expensed as incurred  and
other  marketing  costs  not deferred at year-end are  charged  to  expense
ratably  in  relation to sales over the year in which incurred.   Marketing
costs   deferred  at  year-end  consist  of  media  and  personal   service
advertising prepayments, promotional materials in inventory and  production
costs  of  future media advertising; these assets are expensed in the  year
first used.
      Promotional  discounts  to  retailers in  the  beverage  segment  are
classified  as  a  reduction  of sales; in the  snack  food  segment,  such
discounts  are generally classified as marketing costs.  The difference  in
classification reflects our historical view that promotional discounts  had
become  so  pervasive in the beverage industry, compared to the snack  food
industry,  that  they  were  effectively  price  discounts  and  should  be
classified accordingly.  This differing accounting classification was  also
supported by a survey of the accounting practice of others in the  beverage
and  snack foods industries.  PepsiCo plans to review its accounting policy
in  1995  to determine whether the different accounting classification  for
beverages and snack foods still reflects the substance of the activity  and
whether  it  continues  to  be consistent with others  in  our  industries.
Depending  on the outcome of the review, PepsiCo may change its  accounting
classification of beverage or snack food promotional discounts.  Any change
will   not  impact  reported  earnings  as  it  would  only  result  in   a
reclassification of the cost of promotional discounts between Net Sales and
Selling, general and administrative expenses.
      Cash  Equivalents.   Cash  equivalents  represent  funds  temporarily
invested (with original maturities not exceeding three months) as  part  of
PepsiCo's   management   of   day-to-day  operating   cash   receipts   and
disbursements.  All other investment portfolios, largely held  outside  the
U.S., are primarily classified as short-term investments.
      Net  Income Per Share.  Net income per share is computed by  dividing
net  income  by the weighted average number of shares and share equivalents
outstanding during each year.
     Research and Development Expenses.  Research and development expenses,
which  are expensed as incurred, were $152 million, $113 million  and  $102
million in 1994, 1993 and 1992, respectively.
      Fiscal  Year.   PepsiCo's fiscal year ends on the  last  Saturday  in
December and, as a result, a fifty-third week is added every 5 or 6  years.
The fiscal year ending December 31, 1994 consisted of 53 weeks.

 F-9

Note 2 - Business Segments

Business Segments

PepsiCo  operates  on  a  worldwide basis within three  industry  segments:
beverages,  snack  foods and restaurants.  The beverage  segment  primarily
markets its Pepsi, Diet Pepsi, Mountain Dew and other brands worldwide  and
7UP  internationally, and manufactures concentrates for its brands for sale
to  franchised  bottlers  worldwide.  The segment  also  operates  bottling
plants  and  distribution facilities located in the  U.S.  and  in  various
international  markets,  and  manufactures and  distributes  ready-to-drink
Lipton  tea  products  in  North  America.   In  addition,  under  separate
distribution and joint venture agreements, the segment distributes  certain
previously  existing, as well as manufactures and distributes new  jointly-
developed,  Ocean Spray juice products in the U.S. and Canada.   The  snack
food  segment manufactures, distributes and markets chips and other  snacks
worldwide,   with  Frito-Lay  representing  the  domestic  business.    The
international snack food business includes major operations in Mexico,  the
U.K.  and  Canada.   The  restaurant  segment  consists  primarily  of  the
operations  of  the worldwide Pizza Hut, Taco Bell and  KFC  chains.   PFS,
PepsiCo's  restaurant  distribution operation, supplies  company-owned  and
franchised  restaurants, principally in the U.S.  Net sales  and  operating
profits  of  PFS'  franchisee  operations  have  been  allocated  to   each
restaurant chain.
      Unallocated  Expenses, net includes corporate headquarters  expenses,
minority  interests, primarily in the Gamesa (Mexico)  and  Wedel  (Poland)
snack  food businesses, foreign exchange translation and transaction  gains
and  losses  and  other  corporate items  not  allocated  to  the  business
segments.   Corporate Identifiable Assets consist principally of short-term
investments held outside the U.S. and investments in affiliates.
       PepsiCo  has  invested  in  about  75  joint  ventures,  principally
international and all within PepsiCo's three industry segments, in which it
exercises  significant influence but not control.  Equity in net income  of
these  affiliates  was  $37.8, $30.1, and $40.1 in  1994,  1993  and  1992,
respectively.   The increase in 1994 primarily reflected increased  profits
at  Snack  Ventures Europe (SVE).  The decline in 1993 primarily  reflected
the  expansion costs in a beverage affiliate in India and lower profits  at
SVE.   International snack food affiliates, which represented  the  largest
component  of equity in net income of affiliates, contributed $34.3,  $24.1
and  $23.2  in 1994, 1993 and 1992, respectively.  Dividends received  from
affiliates  totaled  $33.1,  $16.4  and  $29.6  in  1994,  1993  and  1992,
respectively.
      PepsiCo's year-end investments in affiliates totaled $1.3 billion  in
1994,  $1.1  billion  in 1993 and $904.9 in 1992.   The  increase  in  1994
reflected  advances to California Pizza Kitchen (CPK),  a  domestic  casual
dining  restaurant  chain,  and  investments  in  international  franchised
bottling  operations  in  Thailand  and  China,  partially  offset  by  the
translation  impact  of  the late 1994 devaluation  of  the  Mexican  peso.
Significant investments in affiliates at year-end 1994 included  $234.3  in
General Bottlers, a U.S. franchised bottler, $162.9 in CPK, $160.2 in a KFC
Japan  joint venture, $123.2 in BAESA, a franchised bottler with operations
in South America, and $80.9 in SVE.

Items Affecting Comparability

Fiscal Year
1994 consisted of 53 weeks and the years 1989 through 1993 consisted of  52
weeks.  The estimated favorable impact on net sales of the fifty-third week

 F-10

was  $433.5,  increasing beverage, snack food and restaurant net  sales  by
$118.9, $142.6 and $172.0, respectively.  The estimated favorable impact on
operating  profits of the fifty-third week was $64.5, increasing  beverage,
snack  food  and  restaurant operating profits by $16.8, $26.0  and  $22.9,
respectively, and increasing unallocated expenses, net by $1.2.

Unusual Items
Unusual  charges totaled $193.5 in 1992, $170.0 in 1991 and $83.0 in  1990.
These unusual items were as follows:
      Beverages - 1992 included $145.0 in charges consisting of $115.4  and
$29.6  to  reorganize and streamline domestic and international operations,
respectively.  1990 included a $10.5 domestic charge for trade  receivables
exposures.
      Snack Foods - 1992 included a $40.3 charge principally to consolidate
the  Walkers  businesses  in  the U.K.  1991  included  $127.0  in  charges
consisting  of $91.4 and $23.6 to streamline domestic and U.K.  operations,
respectively,  and $12.0 to dispose of all or part of a small  unprofitable
business  in  Japan.   1990  included a $10.6  domestic  charge  for  trade
receivables exposures.
      Restaurants  -  1991 included $43.0 in charges at KFC  consisting  of
$34.0 to streamline operations and $9.0 related to a delay in the U.S. roll-
out  of a new product.  1990 included $28.0 in charges consisting of  $17.6
for  closure of certain underperforming restaurants (Pizza Hut - $9.0, Taco
Bell  - $4.0 and KFC - $4.6) and $10.4 for reorganization charges for Pizza
Hut.
     Unallocated Expenses, net - 1992 included an $8.2 charge to streamline
operations  of  the  SVE  joint venture.  1990 included  $33.9  in  charges
consisting of $18.0 for accelerated contributions to the PepsiCo Foundation
and  $15.9  to  reduce  the carrying amount of an international  Pizza  Hut
affiliate.
      See  Note  16  and Management's Analysis of beverage and  snack  food
performance  on pages 15 and 19, respectively, for additional information  on
restructurings.

Accounting Changes
In  1994,  PepsiCo adopted a preferred method for calculating  the  market-
related  value  of plan assets used in determining annual  pension  expense
(see  Note 13) and extended the depreciable lives on certain domestic Pizza
Hut delivery assets.  As compared to the previous accounting methods, these
changes  increased  1994  operating profit by $49.1,  increasing  beverage,
snack  food  and restaurant profits by $12.4, $15.5 and $19.6  (almost  all
domestic), respectively, and decreasing 1994 unallocated expenses,  net  by
$1.6.
      In 1992, PepsiCo adopted Statements of Financial Accounting Standards
No.  106 and 109, "Employers' Accounting for Postretirement Benefits  Other
Than  Pensions"  and  "Accounting  for  Income  Taxes,"  respectively.   As
compared  to  the previous accounting methods, these changes  reduced  1992
operating  profit by $72.8, decreasing beverage, snack food and  restaurant
profits  by  $22.4,  $30.8  and $15.4, respectively,  and  increasing  1992
unallocated expenses, net by $4.2.  See Notes 12 and 17, respectively.

 F-11

_______________________________________________________________________
INDUSTRY SEGMENTS - NET SALES                  (page 1 of 7)
(dollars in millions)
_______________________________________________________________________
               5-Year Compounded
                  Growth Rate
                 1989  -  1994   1994          1993         1992
_______________________________________________________________________

Beverages:
  Domestic            7.2%      $ 6,541.2    $ 5,918.1   $ 5,485.2
  International      22.2%        3,146.3      2,720.1     2,120.4
                     10.9%        9,687.5      8,638.2     7,605.6

Snack Foods:
  Domestic            9.3%        5,011.3      4,365.3     3,950.4
  International      32.0%        3,253.1      2,661.5     2,181.7
                     15.5%        8,264.4      7,026.8     6,132.1

Restaurants:
  Domestic           13.2%        8,693.9      8,025.7     7,115.4
  International      26.4%        1,826.6      1,330.0     1,116.9
                     14.9%       10,520.5      9,355.7     8,232.3

Combined Segments:
  Domestic           10.1%       20,246.4     18,309.1    16,551.0
  International      26.6%        8,226.0      6,711.6     5,419.0
                     13.6%      $28,472.4    $25,020.7   $21,970.0

_______________________________________________________________________

                                 1991          1990
_______________________________________________________________________

Beverages:
  Domestic                      $ 5,171.5    $ 5,034.5
  International                   1,743.7      1,488.5
                                  6,915.2      6,523.0

Snack Foods:
  Domestic                        3,737.9      3,471.5
  International                   1,512.2      1,295.3
                                  5,250.1      4,766.8

Restaurants:
  Domestic                        6,258.4      5,540.9
  International                     868.5        684.8
                                  7,126.9      6,225.7

Combined Segments:
  Domestic                       15,167.8     14,046.9
  International                   4,124.4      3,468.6
                                $19,292.2    $17,515.5
_______________________________________________________________________

 F-12
______________________________________________________________________
INDUSTRY SEGMENTS - OPERATING PROFITS          (page 2 of 7)
(dollars in millions)
_______________________________________________________________________
               5-Year Compounded
                  Growth Rate
                 1989  -  1994(a)              1994         1993 1992
_______________________________________________________________________
Beverages:
  Domestic           12.1%      $ 1,022.3    $   936.9   $   686.3
  International      20.0%          194.7        172.1       112.3
                     13.2%        1,217.0      1,109.0       798.6

Snack Foods:
  Domestic            8.9%        1,025.1        900.7       775.5
  International      27.1%          351.8        288.9       209.2
                     12.2%        1,376.9      1,189.6       984.7

Restaurants:
  Domestic           12.2%          658.8        685.1       597.8
  International       4.3%           71.5         92.9       120.7
                     11.3%          730.3        778.0       718.5

Combined Segments:
  Domestic           11.1%        2,706.2      2,522.7     2,059.6
  International      20.6%          618.0        553.9       442.2
                     12.3%        3,324.2      3,076.6     2,501.8

Equity Income                        37.8         30.1        40.1

Unallocated Expenses,
 net                               (160.8)      (200.2)     (170.7)

Operating Profit     12.6%      $ 3,201.2    $ 2,906.5   $ 2,371.2
_______________________________________________________________________
(a)  Growth  rates exclude the impact of previously disclosed  1989
     unusual  items affecting international beverages and  domestic
     Taco Bell and KFC.  There were no unusual items in 1994.


 F-13
_______________________________________________________________________
INDUSTRY SEGMENTS - OPERATING PROFITS          (page 3 of 7)
(dollars in millions)
_______________________________________________________________________

                                 1991          1990
_______________________________________________________________________
Beverages:
  Domestic                      $   746.2    $   673.8
  International                     117.1         93.8
                                    863.3        767.6

Snack Foods:
  Domestic                          616.6        732.3
  International                     140.1        160.3
                                    756.7        892.6

Restaurants:
  Domestic                          479.4        447.2
  International                      96.2         75.2
                                    575.6        522.4

Combined Segments:
  Domestic                        1,842.2      1,853.3
  International                     353.4        329.3
                                  2,195.6      2,182.6

Equity Income                        32.2         30.1

Unallocated Expenses,
 net                               (116.0)      (170.6)

Operating Profit                $ 2,111.8    $ 2,042.1
_______________________________________________________________________

 F-14

_______________________________________________________________________
NET SALES BY RESTAURANT CHAIN                (page 4 of 7)
(dollars in millions)
_______________________________________________________________________
               5-Year Compounded
                  Growth Rate
                 1989  -  1994    1994         1993        1992
_______________________________________________________________________

Pizza Hut            12.8%      $ 4,474.4    $4,128.7    $3,603.5
Taco Bell            18.3%        3,401.4     2,901.3     2,460.0
KFC                  14.7%        2,644.7     2,325.7     2,168.8
                     14.9%      $10,520.5    $9,355.7    $8,232.3
_______________________________________________________________________

                                  1991         1990
_______________________________________________________________________

Pizza Hut                       $3,258.3     $2,949.9
Taco Bell                        2,038.1      1,745.5
KFC                              1,830.5      1,530.3
                                $7,126.9     $6,225.7
_______________________________________________________________________
OPERATING PROFITS BY RESTAURANT CHAIN
_______________________________________________________________________
               5 Year Compounded
                  Growth Rate
                 1989 - 1994(a)   1994         1993        1992
_______________________________________________________________________

Pizza Hut             7.5%      $  294.8     $  372.1    $  335.4
Taco Bell            18.7%         270.3        253.1       214.3
KFC                   9.0%         165.2        152.8       168.8
                     11.3%      $  730.3     $  778.0    $  718.5
_______________________________________________________________________
                                  1991         1990
_______________________________________________________________________

Pizza Hut                       $  314.5     $  245.9
Taco Bell                          180.6        149.6
KFC                                 80.5        126.9
                                $  575.6     $  522.4
_______________________________________________________________________
(a)  Growth  rates exclude the impact of previously disclosed  1989
     unusual  items affecting international beverages and  domestic
     Taco Bell and KFC.  There were no unusual items in 1994.

 F-15

_______________________________________________________________________
GEOGRAPHIC AREAS(b)                          (page 5 of 7)
(dollars in millions)
_______________________________________________________________________

                                         Net Sales
                                1994           1993        1992
_______________________________________________________________________

United States                 $20,246.4      $18,309.1   $16,551.0
Europe                          2,177.1        1,819.0     1,349.0
Mexico                          2,022.8        1,613.4     1,234.6
Canada                          1,244.3        1,206.1       979.6
Other                           2,781.8        2,073.1     1,855.8

                              $28,472.4      $25,020.7   $21,970.0

_______________________________________________________________________

                                    Segment Operating Profits
                                1994           1993        1992
_______________________________________________________________________

United States                 $ 2,706.2      $ 2,522.7   $ 2,059.6
Europe                             16.7           47.4        52.6
Mexico                            261.4          223.1       172.1
Canada                             81.6          101.7        78.9
Other                             258.3          181.7       138.6

                              $ 3,324.2      $ 3,076.6   $ 2,501.8

_______________________________________________________________________

                                       Identifiable Assets
                                1994           1993        1992
_______________________________________________________________________

United States                 $14,218.4      $13,589.5   $11,957.0
Europe                          3,062.0        2,666.1     1,948.4
Mexico                            994.7        1,217.1     1,054.6
Canada                          1,342.1        1,364.0     1,340.6
Other                           2,195.6        1,675.1     1,282.0

Combined Segments              21,812.8       20,511.8    17,582.6

Corporate                       2,979.2        3,194.0     3,368.6

                              $24,792.0      $23,705.8   $20,951.2

______________________________________________________________________

(b)  The   results   of   centralized   concentrate   manufacturing
     operations  in  Puerto Rico and Ireland  have  been  allocated
     based upon sales to the respective areas.

 F-16

_______________________________________________________________________
INDUSTRY SEGMENTS                              (page 6 of 7)
(dollars in millions)
_______________________________________________________________________
               5-Year Compounded
                 Growth Rate    Amortization of Intangible Assets
                1989  -  1994      1994        1993         1992
_______________________________________________________________________
Beverages              7.6%     $  164.8     $  157.4    $  137.6
Snack Foods           17.8%         42.0         40.9        40.5
Restaurants           28.9%        105.4        105.4        87.8
                      14.0%     $  312.2     $  303.7    $  265.9

By Restaurant Chain:
  Pizza Hut           31.6%     $   41.5     $   44.7    $   33.3
  Taco Bell           22.9%         26.9         23.0        16.4
  KFC                 31.2%         37.0         37.7        38.1
                      28.9%     $  105.4     $  105.4    $   87.8
_______________________________________________________________________

_______________________________________________________________________
               5 Year Compounded
                 Growth Rate        Depreciation Expense
                1989  -  1994      1994        1993         1992
_______________________________________________________________________
Beverages             14.9%     $  385.4     $  358.5    $  290.6
Snack Foods           11.7%        297.0        279.2       251.2
Restaurants           17.5%        538.8        457.2       374.3
Corporate                            7.0          6.6         6.9
                      15.0%     $1,228.2     $1,101.5    $  923.0

By Restaurant Chain:
  Pizza Hut           17.8%     $  218.6     $  193.4    $  150.5
  Taco Bell           18.1%        156.0        124.6       101.5
  KFC                 16.7%        164.2        139.2       122.3
                      17.5%     $  538.8     $  457.2    $  374.3
_______________________________________________________________________
               5 Year Compounded
                 Growth Rate             Identifiable Assets
                1989  -  1994      1994        1993         1992
_______________________________________________________________________
Beverages              9.1%     $ 9,566.0    $ 9,105.2   $ 7,857.5
Snack Foods            8.8%       5,043.9      4,994.5     4,628.0
Restaurants           18.6%       7,202.9      6,412.1     5,097.1
Corporate                         2,979.2      3,194.0     3,368.6
                      10.4%     $24,792.0    $23,705.8   $20,951.2

By Restaurant Chain:
  Pizza Hut           20.9%     $ 2,536.4    $ 2,232.9   $ 1,676.8
  Taco Bell           21.1%       2,390.7      2,075.9     1,523.7
  KFC                 14.2%       2,275.8      2,103.3     1,896.6
                      18.6%     $ 7,202.9    $ 6,412.1   $ 5,097.1

_______________________________________________________________________

 F-17
_______________________________________________________________________
INDUSTRY SEGMENTS                            (page 7 of 7)
(dollars in millions)
_______________________________________________________________________
               5-Year Compounded
                 Growth Rate           Capital Spending (c)
                1989  -  1994      1994        1993         1992
_______________________________________________________________________
Beverages             20.4%     $  677.1     $  491.3    $  343.7
Snack Foods           15.6%        532.1        491.4       446.2
Restaurants           20.3%      1,072.0      1,004.4       757.2
Corporate                            7.2         20.8        18.0
                      19.0%     $2,288.4     $2,007.9    $1,565.1

Domestic              13.7%     $1,492.6     $1,388.0    $1,069.0
International         35.7%        795.8        619.9       496.1
                      19.0%     $2,288.4     $2,007.9    $1,565.1

By Restaurant Chain:
  Pizza Hut           19.3%     $  389.0     $  295.0    $  212.8
  Taco Bell           35.4%        473.4        459.4       339.0
  KFC                  5.6%        209.6        250.0       205.4
                      20.3%     $1,072.0     $1,004.4    $  757.2
_______________________________________________________________________

                                       Acquisitions and
                                  Investments in Affiliates (d)
                                   1994        1993         1992
_______________________________________________________________________
Beverages                       $  195.0     $  711.5    $  717.5
Snack Foods                         11.8         75.5       201.3
Restaurants                        147.8        588.7       480.4
                                $  354.6     $1,375.7    $1,399.2

Domestic                        $   87.8     $  757.3    $  549.5
International                      266.8        618.4       849.7
                                $  354.6     $1,375.7    $1,399.2

By Restaurant Chain:
  Pizza Hut                     $   94.6     $  312.9    $  247.7
  Taco Bell                         32.3        186.8        72.4
  KFC                               20.9         89.0       160.3
                                $  147.8     $  588.7    $  480.4
______________________________________________________________________
(c)  Included noncash amounts related to capital leases, largely in
     the restaurant segment, of $35.2 in 1994, $26.3 in 1993 and
     $15.5 in 1992.
(d)  Included noncash amounts related to treasury stock and debt
     issued in domestic transactions of $38.8 in 1994, $364.5 in
     1993 and $189.5 in 1992.  Of these noncash amounts, 14%, 65%
     and 58%, respectively, related to the beverage segment and the
     balance related to the restaurant segment.

 F-18

Note 3 - Items Affecting Comparability

The fifty-third week, as described in Note 1, increased earnings in 1994 by
approximately $54.0 million ($34.9 million after-tax or $0.04  per  share).
See  Items  Affecting Comparability on page F-9 for the estimated impact  of
the fifty-third week on comparability of net sales and operating profits.
      The  effects  of unusual items, primarily restructuring charges,  and
accounting  changes on comparability of operating profits are  provided  in
Items Affecting Comparability on page F-10.
      Information regarding the 1994 gain from a public share  offering  by
PepsiCo's  BAESA joint venture and a 1993 charge to increase  net  deferred
tax  liabilities as of the beginning of 1993 for a 1% statutory income  tax
rate increase due to 1993 U.S. tax legislation are provided in Notes 4  and
17, respectively.

Note 4 - Joint Venture Stock Offering

In   1993,   PepsiCo  entered  into  an  arrangement  with  the   principal
shareholders  of  Buenos  Aires Embotelladora S.A.  (BAESA),  a  franchised
bottler  with operations in Argentina and Costa Rica.  PepsiCo  contributed
certain  assets, primarily bottling operations in Chile and Uruguay,  while
the  shareholders  contributed all of their outstanding  shares  in  BAESA,
representing  72.8%  of  the  voting control and  42.5%  of  the  ownership
interest.  Through this arrangement, PepsiCo's ownership in BAESA, which is
accounted for by the equity method, was 25.9%.
      On  March 24, 1994, BAESA completed a public offering of 2.9  million
American Depositary Shares (ADS) at $34.50 per ADS, which are traded on the
New  York  Stock Exchange.  In conjunction with the offering,  PepsiCo  and
certain  other  shareholders exercised options for the  equivalent  of  1.6
million  ADS.   As a result of these transactions, PepsiCo's  ownership  in
BAESA  declined  to  23.8%.  The transactions generated cash  proceeds  for
BAESA  of $136.4 million.  The resulting one-time, noncash gain to  PepsiCo
was $17.8 million ($16.8 million after-tax or $0.02 per share).

Note 5 - Acquisitions and Investments in Affiliates

During  1994,  PepsiCo  completed acquisitions  and  affiliate  investments
aggregating $355 million, principally for cash.  In addition, approximately
$41  million of debt was assumed in these transactions, most of  which  was
subsequently  retired.   This  activity  included  equity  investments   in
international  franchised bottling operations, primarily  in  Thailand  and
China, and acquisitions of international and domestic franchised restaurant
operations and franchised and independent bottling operations, primarily in
India and Mexico.
      During 1993, PepsiCo completed acquisitions and affiliate investments
aggregating $1.4 billion, principally comprised of $1.0 billion in cash and
$335  million in PepsiCo Capital Stock.  Approximately $307 million of debt
was assumed in these transactions, more than half of which was subsequently
retired.  This activity included acquisitions of domestic and international
franchised  restaurant  operations, the buyout of PepsiCo's  joint  venture
partners  in  a  franchised bottling operation in  Spain  and  the  related
acquisition  of  their fruit-flavored beverage concentrate  operation,  the
acquisition  of  the remaining 85% interest in a large franchised  bottling
operation in the Northwestern U.S., the acquisition of a regional  Mexican-
style casual dining restaurant chain in the U.S. and equity investments  in
certain franchised bottling operations in Argentina and Mexico.

 F-19

     During 1992, acquisitions and affiliate investment activity aggregated
$1.4  billion,  principally  for  cash.  In  addition,  approximately  $218
million  of  debt  was assumed in these transactions,  most  of  which  was
subsequently retired.  This activity included acquisitions of international
(primarily Canada) and domestic franchised bottling operations and a number
of  domestic and international franchised restaurant operations, the buyout
of PepsiCo's joint venture partner in a Canadian snack food business and an
equity  investment in a domestic casual dining restaurant  chain  featuring
gourmet   pizza.    In  addition,  PepsiCo  exchanged  certain   previously
consolidated snack food operations in Europe with a net book value  of  $87
million  for  a  60% equity interest in an international snack  food  joint
venture with General Mills, Inc.  PepsiCo secured a controlling interest in
its  Mexican cookie affiliate, Gamesa, through an exchange of certain  non-
cookie operations of Gamesa for its joint venture partner's interest.
      The  acquisitions  have been accounted for by  the  purchase  method;
accordingly,  their  results  are included in  the  Consolidated  Financial
Statements  from  their  respective dates of  acquisition.   The  aggregate
impact  of acquisitions was not material to PepsiCo's net sales, net income
or  net income per share; accordingly, no related pro forma information  is
provided.

Note 6 - Inventories

Inventories are valued at the lower of cost (computed on the average, first-
in, first-out or last-in, first-out [LIFO] method) or net realizable value.
The  cost  of  38%  of  1994 inventories and 41% of  1993  inventories  was
computed using the LIFO method.  Use of the LIFO method increased the total
1994  and  1993 year-end inventory amounts below by $5.5 million  and  $8.9
million, respectively.


                                       1994         1993

Raw materials and supplies            $454.8       $463.9
Finished goods                         515.2        460.8
                                      $970.0       $924.7

      See page 8 of Management's Analysis - Overview, for a discussion  of
PepsiCo's  use of futures contracts to hedge its exposure to  market  price
fluctuations  for  certain  raw  materials.   Gains  and  losses  on  these
contracts  are  deferred and included in the related cost of raw  materials
when  purchased.  Gains and losses realized in 1994 or deferred at year-end
were  not  significant.  As of December 31, 1994, PepsiCo had various  open
contracts, generally expiring by December 1995, which were not material.

Note 7 - Property, Plant and Equipment

Property,  plant  and  equipment  are  stated  at  cost.   Depreciation  is
calculated  principally on a straight-line basis over the estimated  useful
lives of the assets.  Depreciation expense in 1994, 1993 and 1992 was  $1.2
billion, $1.1 billion and $923 million, respectively.

 F-20

                                     1994         1993

Land                               $ 1,321.6   $ 1,186.4
Buildings and improvements           5,664.1     5,017.6
Capital leases, primarily
 buildings                             451.2       402.6
Machinery and equipment              8,208.1     7,175.0
Construction in progress               485.1       468.4
                                    16,130.1    14,250.0

Accumulated depreciation            (6,247.3)   (5,394.4)
                                   $ 9,882.8   $ 8,855.6


Note 8 - Intangible Assets

Identifiable intangible assets arose from the allocation of purchase prices
of  businesses  acquired  and consist principally of  reacquired  franchise
rights  and trademarks.  Reacquired franchise rights relate to acquisitions
of franchised bottling and restaurant operations and trademarks principally
relate    to   acquisitions  of  international  snack  food  and   beverage
trademarks.  Amounts assigned to such identifiable intangibles  were  based
on  independent appraisals or internal estimates.  Goodwill represents  the
residual purchase price after allocation to all identifiable net assets.
      Intangible  assets  are  amortized  on  a  straight-line  basis  over
appropriate  periods  generally ranging from 20 to 40  years.   Accumulated
amortization,  included in the amounts below, was  $1.6  billion  and  $1.3
billion at year-end 1994 and 1993, respectively.

                                     1994         1993

Reacquired franchise rights        $3,974.0    $3,959.7
Trademarks                            768.5       849.1
Other identifiable
 intangibles                          249.7       204.1
Goodwill                            2,849.9     2,916.6
                                   $7,842.1    $7,929.5

      The  recoverability  of  carrying amounts  of  intangible  assets  is
evaluated  on  a recurring basis.  The primary indicators of recoverability
are  current or forecasted profitability over the estimated remaining  life
of  the intangible assets, measured as the combined operating profit of the
acquired  business  (including amortization of the intangible  assets)  and
existing  businesses  that are directly related to the  acquired  business.
Consideration  is  also given to the estimated disposal values  of  certain
identifiable  intangible  assets compared to their  carrying  amounts.   If
recoverability of an intangible asset is unlikely based on the  evaluation,
the  carrying  amount  is reduced by the amount it exceeds  the  forecasted
operating  profits and any disposal value. For the three-year period  ended
December  31,  1994, there were no significant adjustments to the  carrying
amounts of the intangible assets resulting from these evaluations.

 F-21

Note 9 - Short-term Borrowings and Long-term Debt

______________________________________________________________________________
                                                     1994           1993
______________________________________________________________________________
Short-term Borrowings
Commercial paper (5.4% and 3.3%) (A)              $ 2,254.4      $ 3,535.0
Current maturities of long-term
 debt issuances (A)                                   987.5        1,183.1
Notes (5.4% and 3.5%) (A)                           1,492.4          394.0
Other borrowings (6.5% and 6.3%)                      444.2          529.1
Amount reclassified
 to long-term debt (B)                             (4,500.0)      (3,450.0)
                                                  $   678.5      $ 2,191.2
Long-term Debt
Short-term borrowings, reclassified (B)           $ 4,500.0      $ 3,450.0
Notes due 1995 through 2008 (6.6% and
 6.5%) (A)                                          3,724.7        3,873.8
Euro notes, 8% due 1997                               250.0              -
Zero coupon notes, $795 million due 1995-2012
 (14.6% and 14.4% annual yield to
   maturity)                                          219.2          327.2
Japanese yen 3.3% bonds due 1997 (D)                  200.8              -
Swiss franc perpetual Foreign Interest
 Payment bonds (C)                                    213.0          212.2
Swiss franc 5 1/4% bearer bonds
 due 1995 (D)                                          99.7           90.1
Swiss franc 7 1/8% notes due 1994 (D)                     -           69.8
Capital lease obligations
 (See Note 11)                                        298.2          291.4
Other, due 1995-2015 (8.1% and 6.6%)                  322.4          311.2

                                                    9,828.0        8,625.7

Less current maturities of long-term
 debt issuances                                      (987.5)      (1,183.1)
                                                  $ 8,840.5      $ 7,442.6
______________________________________________________________________________
      The interest rates in the above table indicate, where applicable, the
weighted average rates at year-end 1994 and 1993, respectively.
     The carrying amount of long-term debt includes any related discount or
premium  and unamortized debt issuance costs.  The debt agreements  include
various  restrictions, none of which are presently significant to  PepsiCo.
Subsequent  to year-end 1994, PepsiCo issued $150 million of Notes  through
February 7, 1995.
      The  annual  maturities  of long-term debt  through  1999,  excluding
capital lease obligations and the reclassified short-term borrowings,  are:
1995-$1.0 billion, 1996-$1.1 billion, 1997-$1.0 billion, 1998-$1.2  billion
and 1999-$280 million.
      See  Management's Analysis - Overview on page 8 for a discussion  of
PepsiCo's use of interest rate swaps and currency exchange agreements   and
its management of the inherent credit risk and Note 10.

 F-22

      (A)   The  following table indicates the notional amount and weighted
average interest rates, by category, of interest rate swaps outstanding  at
year-end  1994  and  1993,  respectively.  The  weighted  average  variable
interest  rates  that PepsiCo pays, which are indexed primarily  to  either
commercial  paper or LIBOR rates, are based on rates as of  the  respective
balance sheet date and are subject to change.  Terms of interest rate  swap
agreements  match the debt they modify and terminate in 1995 through  2008.
The  differential to be paid or received on interest rate swaps is  accrued
as  interest  rates change and is charged or credited to  interest  expense
over the life of the agreements.  The carrying amount of each interest rate
swap  is  reflected in the Consolidated Balance Sheet as  a  receivable  or
payable under the appropriate current asset or liability caption.

______________________________________________________________________________
                                             1994             1993
______________________________________________________________________________

Receive fixed-pay variable:
     Notional amount                         $1,557.0        $570.0
     Weighted average receive rate               5.89%         5.96%
     Weighted average pay rate                   6.12%         3.28%

Receive variable-pay variable:
     Notional amount                         $1,008.5        $465.0
     Weighted average receive rate               4.90%         3.81%
     Weighted average pay rate                   5.99%         3.17%

Receive variable-pay fixed:
     Notional amount                         $  215.0        $265.0
     Weighted average receive rate               6.56%         3.84%
     Weighted average pay rate                   8.22%         7.46%
______________________________________________________________________________
       The  following  table  identifies  the  composition  of  total  debt
(excluding  capital  lease obligations and the effect of  the  reclassified
amounts  from short-term borrowings) after giving effect to the  impact  of
interest  rate  swaps.  All short-term borrowings are  considered  variable
interest rate debt for purposes of this table.
______________________________________________________________________________
                                1994                1993
                                   Weighted            Weighted
                                   Average             Average
                         Carrying  Interest  Carrying  Interest
                         Amount    Rate      Amount    Rate

Variable interest
  rate debt:
   Short-term
    borrowings           $5,178.5  6.19%     $5,641.2  4.11%
   Long-term debt         1,102.5  6.25%        567.6  4.75%
                          6,281.0  6.20%      6,208.8  4.17%

Fixed interest rate
 debt                     2,939.8  6.96%      3,133.6  6.95%
                         $9,220.8  6.44%     $9,342.4  5.10%
______________________________________________________________________________

 F-23

      (B)   At year-end 1994 and 1993, PepsiCo had unused revolving  credit
facilities   covering  potential  borrowings  aggregating   $3.5   billion.
Effective  January 3, 1995, PepsiCo replaced its existing credit facilities
with  new  revolving credit facilities aggregating $4.5 billion,  of  which
$1.0  billion expire in 1996 and $3.5 billion expire in 2000.  At  year-end
1994  and  1993, $4.5 billion and $3.5 billion, respectively, of short-term
borrowings  were classified as long-term debt, reflecting PepsiCo's  intent
and  ability,  through  the existence of the unused credit  facilities,  to
refinance  these  borrowings.   These credit facilities  exist  largely  to
support  the  issuances  of short-term borrowings  and  are  available  for
acquisitions and other general corporate purposes.
      (C)  The coupon rate of the Swiss franc 400 million perpetual Foreign
Interest  Payment bonds issued in 1986 is 7 1/2% through 1996.   The  bonds
have no stated maturity date.  At the end of each 10-year period after  the
issuance  of the bonds, PepsiCo and the bondholders each have the right  to
cause  redemption of the bonds.  If not redeemed, the coupon rate  will  be
adjusted based on the prevailing yield of 10-year U.S. Treasury Securities.
The  principal of the bonds is denominated in Swiss francs.   PepsiCo  can,
and  intends  to, limit the ultimate redemption amount to the  U.S.  dollar
proceeds  at issuance, which is the basis of the carrying amount.  Interest
payments are made in U.S. dollars and are calculated by applying the coupon
rate to the original U.S. dollar principal proceeds of $214 million.
      (D)   PepsiCo has entered into currency exchange agreements to  hedge
its   foreign  currency  exposure  on  these  issues  of  non-U.S.   dollar
denominated  debt.   At year-end 1994, the carrying  amount  of  this  debt
aggregated  $301  million and the receivables and  payables  under  related
currency  exchange  agreements  aggregated  $50  million  and  $2  million,
respectively,  resulting in a net effective U.S. dollar liability  of  $253
million  with a weighted average interest rate of 6.6%.  At year-end  1993,
the aggregate carrying amount of the debt and the receivables under related
currency   exchange  agreements  were  $160  million   and   $41   million,
respectively,  resulting in a net effective U.S. dollar liability  of  $119
million  with a weighted average fixed interest rate of 6.5%.  The carrying
amount of each currency exchange agreement is reflected in the Consolidated
Balance Sheet as a receivable or payable under the appropriate current  and
noncurrent asset and liability captions.  Changes in the carrying amount of
a  currency  exchange agreement resulting from exchange rate movements  are
offset  by  changes in the carrying amount of the related  non-U.S.  dollar
denominated debt, as both amounts are based on current exchange rates.

Note 10 - Fair Value of Financial Instruments

The   carrying  amounts  in  the  following  table  are  included  in   the
Consolidated Balance Sheet under the indicated captions, except  for  debt-
related  derivative instruments (interest rate swaps and currency  exchange
agreements),  which are included in the appropriate current  or  noncurrent
asset  or  liability  caption.   Investments  consist  primarily  of   debt
securities  and  have  been  classified  as  held-to-maturity.   Noncurrent
investments mature at various dates through 2000.
      Because  of  the  short maturity of cash equivalents  and  short-term
investments, the carrying amount approximates fair value.  The  fair  value
of  noncurrent investments is based upon market quotes.  The fair value  of
debt, debt-related derivative instruments and guarantees is estimated using
market quotes, valuation models and calculations based on market rates.
      See  Management's Analysis - Overview on page 8 and Note 9 for  more
information  regarding PepsiCo's use of interest rate  swaps  and  currency
exchange agreements and its management of the inherent credit risk.


 F-24
______________________________________________________________________________
                                         1994               1993
                                    Carrying  Fair     Carrying  Fair
                                    Amount    Value    Amount    Value

Assets
 Cash and
   cash  equivalents               $  330.7  $  330.7   $  226.9   $  226.9
 Short-term
   investments                     $1,157.4  $1,157.4   $1,573.8   $1,573.8
 Other assets (noncurrent
   investments)                    $   48.0  $   47.5   $   55.5   $   55.4

Liabilities
 Debt:
  Short-term borrowings
   and long-term debt,
    net of capital
      leases                       $9,220.8  $9,265.4   $9,342.4   $9,626.0
  Debt-related derivative
   instruments:
    Open contracts in asset
      position                        (51.3)    (51.4)     (42.4)     (72.7)
    Open contracts in liability
      position                          7.9      54.1        1.2       32.8

        Net  debt                  $9,177.4  $9,268.1   $9,301.2   $9,586.1

  Guarantees                              -   $   2.7          -   $    1.7
______________________________________________________________________________
Note 11 - Leases

PepsiCo  has  noncancelable commitments under both  capital  and  long-term
operating  leases, primarily for restaurant units.  Certain of these  units
have  been  subleased to restaurant franchisees.  In addition,  PepsiCo  is
lessee   under  noncancelable  leases  covering  vehicles,  equipment   and
nonrestaurant real estate.  Capital and operating lease commitments  expire
at  various  dates  through  2088 and, in  many  cases,  provide  for  rent
escalations  and  renewal options. Most leases require payment  of  related
executory costs which include property taxes, maintenance and insurance.
       Future   minimum   commitments  and   sublease   receivables   under
noncancelable leases are as follows:

______________________________________________________________________________
                        Commitments     Sublease Receivables
                                         Direct
                    Capital   Operating Financing Operating
______________________________________________________________________________

1995                $ 58.9    $  313.0     $ 3.2     $ 9.6
1996                  53.9       276.4       3.0       8.8
1997                  46.7       247.3       2.7       7.7
1998                  65.2       228.7       2.3       6.7
1999                  34.4       203.3       2.0       6.0
Later years          279.0     1,072.1       7.1      24.2

                    $538.1    $2,340.8     $20.3     $63.0

______________________________________________________________________________
 F-25

      At year-end 1994, the present value of minimum payments under capital
leases was $298 million, after deducting $1 million for estimated executory
costs and $239 million representing imputed interest.  The present value of
minimum receivables under direct financing subleases was $13 million  after
deducting $7 million of unearned interest income.

     Rental expense and income were as follows:

______________________________________________________________________________
                                               1994      1993     1992
Rental expense
  Minimum                                    $433.5    $392.3    $351.5
  Contingent                                   31.7      27.5      27.5
                                             $465.2    $419.8    $379.0

Rental income
  Minimum                                    $ 11.7    $ 12.2    $ 10.2
  Contingent                                    3.5       4.4       4.5
                                             $ 15.2    $ 16.6    $ 14.7
___________________________________________________________________________
      Contingent  rentals are based on sales by restaurants  in  excess  of
levels stipulated in the lease agreements.

Note 12 - Postretirement Benefits Other Than Pensions

PepsiCo  provides  postretirement health care benefits to eligible  retired
employees and their dependents, principally in the U.S.  Retirees who  have
10  years  of  service and attain age 55 while in service with PepsiCo  are
eligible to participate in the postretirement benefit plans.  The plans are
not funded and were largely noncontributory through 1993.
      In  1992, PepsiCo adopted Statement of Financial Accounting Standards
No.  106,  "Employers' Accounting for Postretirement  Benefits  Other  Than
Pensions."   The cumulative effect of this change in accounting  for  years
prior to 1992 resulted in a noncash charge of $575.3 million pretax ($356.7
million after-tax or $0.44 per share).
      Effective in 1993 and 1994, PepsiCo implemented programs intended  to
stem rising costs and introduced retiree cost-sharing, including adopting a
provision  which  limits its future obligation to absorb health  care  cost
inflation.  These amendments resulted in an unrecognized prior service gain
of $191 million, which is being amortized on a straight-line basis over the
average  remaining employee service period of 10 years as  a  reduction  in
postretirement benefit expense beginning in 1993.
      The  postretirement benefit expense for 1994, 1993 and 1992  included
the following components:

______________________________________________________________________________
                                            1994        1993      1992
______________________________________________________________________________
Service cost of benefits earned           $ 18.6       $ 14.7    $25.5
Interest cost on accumulated
 postretirement benefit obligation          41.4         40.6     50.8
Amortization  of prior service (gain) cost (19.6)       (19.6)     0.1
Amortization of net loss                     5.6          0.5        -

                                          $ 46.0       $ 36.2    $76.4
______________________________________________________________________________
 F-26

      The  decline  in  the  1993 expense was primarily  due  to  the  plan
amendments, reflecting reductions in service and interest costs as well  as
the amortization of the unrecognized prior service gain.
      The  1994  and  1993  postretirement benefit liability  included  the
following components:
______________________________________________________________________________
                                                     1994        1993
______________________________________________________________________________
Actuarial present value of postretirement
 benefit obligation:

  Retirees                                          $(288.6)   $(313.8)
  Fully eligible active plan participants             (88.1)    (107.3)
  Other active plan participants                     (148.0)    (206.9)

Accumulated postretirement benefit obligation        (524.7)    (628.0)

Unrecognized prior service gain                      (151.9)    (171.5)

Unrecognized net loss                                  11.5      148.6

                                                    $(665.1)   $(650.9)
______________________________________________________________________________
      The discount rate assumptions used in computing the information above
were as follows:
                                        1994      1993      1992

     Postretirement benefit expense     6.8%      8.2       8.9
     Accumulated postretirement
      benefit obligation                9.1%      6.8       8.2

      The  year-to-year  fluctuations  in  the  discount  rate  assumptions
primarily  reflect  changes  in U.S. interest  rates.   The  discount  rate
represents  the expected yield on a portfolio of high-grade  (AA  rated  or
equivalent)  fixed-income investments with cash flow streams sufficient  to
satisfy benefit obligations under the plans when due.
      As  a result of the plan amendments discussed above, separate assumed
health  care cost trend rates are used for employees who retire before  and
after  the effective date of the amendments.  The assumed health care  cost
trend rate for employees who retired before the effective date is 9.5%  for
1995,  declining gradually to 5.5% in 2005 and thereafter.   For  employees
retiring  after  the  effective date, the trend  rate  is  8.0%  for  1995,
declining  gradually to 0% in 2005 and thereafter.  A 1 point  increase  in
the  assumed  health  care cost trend rate would have  increased  the  1994
postretirement benefit expense by $2.0 million and would have increased the
1994 accumulated postretirement benefit obligation by $20.6 million.

Note 13 - Pension Plans

PepsiCo  sponsors  noncontributory defined benefit pension  plans  covering
substantially all full-time domestic employees as well as contributory  and
noncontributory   defined   benefit   pension   plans   covering    certain
international employees.  Benefits generally are based on years of  service
and compensation or stated amounts for each year of service.  PepsiCo funds
the  domestic  plans  in  amounts not less than minimum  statutory  funding
requirements  nor  more than the maximum amount that can  be  deducted  for
federal  income  tax purposes.  International plans are funded  in  amounts

 F-27

sufficient to comply with local statutory requirements.  The plans'  assets
consist  principally of equity securities, government  and  corporate  debt
securities  and  other fixed income obligations.  For 1994  and  1993,  the
domestic plan assets included 6.9 million shares of PepsiCo Capital  Stock,
with  a  market  value of $227.2 million and $265.7 million,  respectively.
Dividends  on  PepsiCo Capital Stock of $4.7 million and $4.0 million  were
received by the domestic plans in 1994 and 1993, respectively.
      The  international plans presented below are primarily  comprised  of
those in the U.K. and Canada for all three years as well as those in Mexico
and  Japan  for 1994 and 1993.  Information for 1992 has not been restated,
since complete information for plans in Mexico and Japan was not available.
      The net pension expense for domestic company-sponsored plans included
the following components:
______________________________________________________________________________
                                             1994       1993       1992
______________________________________________________________________________
Service cost of benefits earned           $  69.8      $  57.1   $ 52.3
Interest cost on projected benefit
 obligation                                  84.0         75.6     72.0
Return on plan assets:
  Actual loss (gain)                         19.7       (161.5)   (61.3)
  Deferred (loss) gain                     (130.5)        70.9    (26.2)
                                           (110.8)       (90.6)   (87.5)
Amortization of net transition gain         (19.0)       (19.0)   (19.0)
Net other amortization                        9.1          8.8      8.2

                                          $  33.1      $  31.9   $ 26.0
_____________________________________________________________________
      The  net pension expense (income) for international company-sponsored
plans included the following components:
______________________________________________________________________________
                                             1994       1993       1992
______________________________________________________________________________
Service cost of benefits earned           $ 15.0       $ 12.4    $  8.6
Interest cost on projected benefit
 obligation                                 15.4         15.0      10.9
Return on plan assets:
  Actual loss (gain)                         8.1        (40.8)    (36.0)
  Deferred (loss) gain                     (32.5)        20.4      18.6
                                           (24.4)       (20.4)    (17.4)
Amortization of net transition (gain)
 loss                                       (0.2)         0.3         -
Net other amortization                       1.7          1.7      (6.5)

                                          $  7.5       $  9.0    $ (4.4)
______________________________________________________________________________
     Inclusion of the plans in Mexico and Japan increased the 1994 and 1993
pension expense by $7.9 million and $5.5 million, respectively.

 F-28

      Reconciliations  of the funded status of the domestic  plans  to  the
pension liability are as follows:

                                 Assets Exceed      Accumulated Benefits
                              Accumulated Benefits      Exceed Assets
                                1994       1993        1994       1993
______________________________________________________________________________
Actuarial present value of
 benefit obligation:
  Vested benefits             $ (774.0)   $ (726.0) $(21.6)  $(192.8)
  Nonvested benefits             (97.4)      (99.0)   (1.6)    (28.3)

Accumulated benefit
 obligation                     (871.4)     (825.0)  (23.2)   (221.1)
Effect of projected
 compensation increases         (111.1)     (131.6)  (47.6)    (41.7)

Projected  benefit obligation   (982.5)     (956.6)  (70.8)    (262.8)
Plan assets at fair value      1,133.0     1,018.7     2.8     185.2

Plan assets in excess of
 (less than) projected
  benefit obligation             150.5        62.1   (68.0)    (77.6)
Unrecognized prior
 service cost                     30.6        11.7    30.0      49.9
Unrecognized net
 (gain) loss                     (71.3)       16.0     3.7      26.1
Unrecognized net
 transition (gain) loss          (73.1)      (89.0)    0.3      (2.8)
Adjustment required to
   recognize  minimum  liability     -           -       -     (33.0)


Prepaid (accrued) pension
 liability                    $   36.7    $    0.8  $(34.0)  $ (37.4)
 
 _____________________________________________________________________________

 F-29

     Reconciliations of the funded status of the international plans to the
pension liability are as follows:

                                 Assets Exceed      Accumulated Benefits
                              Accumulated Benefits      Exceed Assets

                                1994       1993        1994       1993
___________________________________________________________________________
Actuarial present value of
 benefit obligation:
  Vested benefits             $(124.4)    $(138.8)  $(22.8)    $(28.0)
  Nonvested benefits             (2.3)       (3.4)    (7.4)      (5.4)

Accumulated benefit
 obligation                    (126.7)     (142.2)   (30.2)     (33.4)
Effect of projected
 compensation increases         (24.1)      (22.9)   (10.1)     (18.4)

Projected  benefit  obligation (150.8)     (165.1)   (40.3)     (51.8)
Plan assets at fair value       213.4       221.7     15.5       17.3

Plan assets in excess of
 (less than) projected
  benefit obligation             62.6        56.6    (24.8)     (34.5)
Unrecognized prior
 service cost                     3.5         3.2      0.3        0.5
Unrecognized net
 loss (gain)                     14.0        11.9     (3.1)       7.7
Unrecognized net
 transition (gain) loss          (1.8)       (2.6)     4.9        8.1
Adjustment required to
  recognize  minimum  liability     -           -        -       (4.3)


Prepaid (accrued) pension
 liability                    $  78.3     $  69.1   $(22.7)    $(22.5)
        
___________________________________________________________________________
     The assumptions used to compute the domestic information above were as
follows:
                                               1994      1993    1992
______________________________________________________________________________
Discount rate - pension expense                 7.0%     8.2       8.4

Expected long-term rate of return
 on plan assets                                10.0%    10.0      10.0

Discount rate - projected benefit
 obligation                                     9.0%     7.0       8.2

Future compensation growth rate              3.3%-7.0% 3.3-7.0   3.3-7.0
______________________________________________________________________________
 F-30


      The  assumptions used to compute the international information  above
were as follows:
                                               1994      1993    1992
______________________________________________________________________________
Discount rate - pension expense                 7.3%     9.0        9.5

Expected long-term rate of return
 on plan assets                                11.3%    10.8       10.8

Discount rate - projected benefit
 obligation                                     9.3%     7.4        9.0

Future compensation growth rate              3.0%-8.5% 3.5-8.5   5.0-7.0
______________________________________________________________________________
      The  discount  rates and rates of return for the international  plans
represent weighted averages.

      The  year-to-year  fluctuations  in  the  discount  rate  assumptions
primarily  reflect changes in interest rates.  The discount rates represent
the  expected  yield on a portfolio of high-grade (AA rated or  equivalent)
fixed-income  investments  with  cash flow streams  sufficient  to  satisfy
benefit  obligations under the plans when due.  The higher assumed discount
rates used to measure the 1994 projected benefit obligation compared to the
assumed discount rate used to measure the 1993 projected benefit obligation
changed the funded status of certain plans from underfunded to overfunded.
     In 1994, PepsiCo changed the method for calculating the market-related
value  of plan assets used in determining the return-on-asset component  of
annual  pension expense and the cumulative net unrecognized  gain  or  loss
subject  to  amortization.   Under  the  previous  accounting  method,  the
calculation of the market-related value of assets reflected amortization of
the  actual capital return on assets on a straight-line basis over a  five-
year  period.   Under the new method, the calculation of the market-related
value  of assets reflects the long-term rate of return expected by  PepsiCo
and  amortization  of the difference between the actual  return  (including
capital,  dividends and interest) and the expected return over a  five-year
period.   PepsiCo  believes the new method is widely used in  practice  and
preferable  because it results in calculated plan asset  values  that  more
closely approximate fair value, while still mitigating the effect of annual
market-value  fluctuations.  Under both methods, only  the  cumulative  net
unrecognized gain or loss which exceeds 10% of the greater of the projected
benefit obligation or the market-related value of plan assets is subject to
amortization.  This change resulted in a noncash benefit in 1994  of  $37.8
million  ($23.3  million  after-tax or $0.03 per  share)  representing  the
cumulative  effect of the change related to years prior to 1994  and  $35.1
million  in  lower pension expense ($21.6 million after-tax  or  $0.03  per
share) related to 1994 as compared to the previous accounting method.   Had
this  change  been applied retroactively, pension expense would  have  been
reduced  by $16.4 million ($10.7 million after-tax or $0.01 per share)  and
$9.5  million ($6.5 million after-tax or $0.01 per share) in 1993 and 1992,
respectively.

 F-31

Note 14 - Postemployment Benefits Other Than to Retirees

Effective  the  beginning of 1994, PepsiCo adopted Statement  of  Financial
Accounting  Standards  No.  112  (SFAS  112),  "Employers'  Accounting  for
Postemployment Benefits." SFAS 112 requires PepsiCo to accrue the  cost  of
certain  postemployment  benefits to be  paid  to  terminated  or  inactive
employees  other  than retirees.  The principal effect to  PepsiCo  results
from  accruing  severance benefits to be provided to employees  of  certain
business  units who are terminated in the ordinary course of business  over
the  expected  service lives of the employees.  Previously, these  benefits
were accrued upon the occurrence of an event.  Severance benefits resulting
from  actions  not in the ordinary course of business will continue  to  be
accrued  when  those  actions  occur.  The cumulative  effect  charge  upon
adoption  of  SFAS  112, which relates to years prior to  1994,  was  $84.6
million ($55.3 million after-tax or $0.07 per share).  As compared  to  the
previous  accounting method, the current year impact of adopting  SFAS  112
was  immaterial to 1994 operating profits.  PepsiCo's cash flows have  been
unaffected  by this accounting change as PepsiCo continues to largely  fund
postemployment benefit costs as incurred.

Note 15 - Franchise Arrangements

Franchise  arrangements with restaurant franchisees generally  provide  for
initial  fees  and  continuing royalty payments to  PepsiCo  based  upon  a
percentage  of sales.  The arrangements are intended to assist  franchisees
through,  among  other things, product development and  marketing  programs
initiated  by PepsiCo for both its company-owned and franchised operations.
On a limited basis, franchisees have also entered into leases of restaurant
properties  leased  or owned by PepsiCo (see Note 11).   Royalty  revenues,
initial  fees and rental payments from franchisees, which are  included  in
Net  Sales, aggregated $407 million, $357 million and $344 million in 1994,
1993  and  1992, respectively.  Franchise royalty revenues, which represent
the  majority  of these amounts, are recognized when earned.  PepsiCo  also
has franchise arrangements with beverage bottlers, which do not provide for
royalty payments.

Note 16 - Restructurings

PepsiCo  recorded restructuring charges of $193.5 million in  1992  ($128.5
million  after-tax or $0.16 per share) and $149.0 million in  1991  ($102.3
million after-tax or $0.13 per share).  The 1992 charge related principally
to   streamlining   and  reorganizing  the  domestic   beverage   business,
consolidating  the  snack food businesses in the U.K. and  streamlining  an
acquired  beverage bottling business in Spain.  The 1991 charge related  to
streamlining  snack food operations in the U.S. and U.K. and operations  at
KFC.   These charges were classified in Selling, general and administrative
expenses  and were primarily for costs requiring future cash outlays.   The
annual  accrual  activity, including asset valuation  allowances,  and  the
related components were as follows:

 F-32

______________________________________________________________________________
                                    1994      1993      1992
______________________________________________________________________________
Annual Accrual Activity
Balance - Beginning of year        $121.7    $ 253.2   $112.6
New restructuring charges               -          -    193.5
New restructuring accruals -
 purchase price adjustments (A)         -          -     41.5
Accretion of interest on net
 present value of severance           2.8        6.9        -
Cash payments                       (50.6)    (122.8)   (83.5)
Asset write-offs                     (4.0)      (9.1)   (10.3)
Change in estimates                 (28.7)      (6.5)    (0.6)
Balance - End of year              $ 41.2    $ 121.7   $253.2

Accrual Components
Facility closings/fixed asset
 disposals                         $  3.0    $  13.9   $ 35.3
Employee terminations (A)            36.1      103.2    153.9
Relocation of employees
 and equipment                        0.7        2.2     29.1
Nonrecurring costs of
 redesigning core business
  processes (B)                         -        0.7     25.3
Other                                 1.4        1.7      9.6

Balance - End of year (C)          $ 41.2    $ 121.7   $253.2

______________________________________________________________________________
      (A)   Included  amounts for termination of employees of  an  acquired
beverage  bottling  business in Spain accounted for  as  a  purchase.   The
acquired  business  was  formerly accounted  for  as  a  30%  owned  equity
investment.    Upon  acquisition  of  the  remaining  70%,   30%   of   the
restructuring  charge was included in income and 70% was a  purchase  price
adjustment.
      (B)  Included only specific nonrecurring incremental and direct costs
for  activities  clearly  identifiable with the redesign  of  the  domestic
beverages' core business processes.
      (C)   The  1994 year-end balance of $41 million, which was  primarily
included  in  Other current liabilities, represented estimated future  cash
payments of $26 million, $12 million and $3 million in 1995, 1996 and 1997,
respectively.

 F-33

Note 17 - Income Taxes

In  1992,  PepsiCo adopted Statement of Financial Accounting Standards  No.
109  (SFAS 109), "Accounting for Income Taxes."  PepsiCo elected  to  adopt
SFAS  109 on a prospective basis, resulting in a noncash tax charge in 1992
of $570.7 million ($0.71 per share) for the cumulative effect of the change
related   to  years  prior  to  1992.   The  cumulative  effect   primarily
represented the recording of additional deferred tax liabilities related to
identifiable   intangible  assets,  principally  acquired  trademarks   and
reacquired  franchise rights, that have no tax bases.  These  deferred  tax
liabilities would be paid only in the unlikely event the related intangible
assets were sold in taxable transactions.
       Detail of the provision for income taxes on income before cumulative
effect of accounting changes was as follows:
______________________________________________________________________________
                                 1994      1993      1992
______________________________________________________________________________
Current-  Federal               $642.0    $466.8    $413.0
          Foreign                174.1     195.5     170.4
          State                  131.2      89.0      65.7
                                 947.3     751.3     649.1
Deferred- Federal                (63.9)     78.2     (18.8)
          Foreign                 (1.8)    (12.5)    (33.5)
          State                   (1.2)     17.6       0.3
                                 (66.9)     83.3     (52.0)
                                $880.4    $834.6    $597.1
                               
____________________________________________________________________________
       In 1993, a charge of $29.9 million ($0.04 per share) was recorded to
increase net deferred tax liabilities as of the beginning of 1993 for a  1%
statutory  income  tax rate increase under 1993 U.S. tax legislation.   The
effect  of  the  higher  rate  on the 1993 increase  in  net  deferred  tax
liabilities through the enactment date of the legislation was immaterial.
       U.S. and foreign income before income taxes and cumulative effect of
accounting changes were as follows:
______________________________________________________________________________
                                  1994         1993      1992
______________________________________________________________________________
U.S.                            $1,762.4     $1,633.0  $1,196.8
Foreign                            902.0        789.5     702.0
                                $2,664.4     $2,422.5  $1,898.8  
______________________________________________________________________________
       PepsiCo operates centralized concentrate manufacturing facilities in
Puerto Rico and Ireland under long-term tax incentives.  The foreign amount
in  the  above  table  includes  approximately  50%  (consistent  with  the
allocation  for tax purposes) of the income from U.S. sales of  concentrate
manufactured in Puerto Rico.  See Management's Analysis - Overview on  page
10 for a discussion of the reduction of the U.S. tax credit associated with
beverage concentrate operations in Puerto Rico.

 F-34

       Reconciliation of the U.S. federal statutory tax rate  to  PepsiCo's
effective  tax rate on pretax income, based on the dollar impact  of  these
major components on the provision for income taxes, was as follows:
_______________________________________________________________________________
                                   1994    1993      1992
_______________________________________________________________________________
U.S. federal statutory tax rate     35.0%    35.0%     34.0%
State income tax, net of federal
   tax benefit                       3.2      2.9       2.3
Effect of lower taxes on foreign
 income (including Puerto Rico
  and Ireland)                      (5.4)    (3.3)     (5.0)
Adjustment to the beginning-of-
 the-year deferred tax assets
  valuation allowance               (1.3)       -         -
Reduction of prior year
 foreign accruals                      -     (2.0)        -
Effect of 1993 tax legislation on
 deferred income taxes                 -      1.1         -
Nondeductible amortization of
  domestic goodwill                  0.8      0.8       0.9
Other, net                           0.7        -      (0.8)
Effective tax rate                  33.0%    34.5%     31.4%

_____________________________________________________________________________
       Detail of the 1994 and 1993 deferred tax liabilities (assets) was as
follows:
______________________________________________________________________________
                                          1994          1993
______________________________________________________________________________
Intangible assets other than
   nondeductible goodwill            $ 1,627.8     $ 1,551.0
Property, plant and equipment            506.4         552.3
Safe harbor leases                       171.2         177.5
Zero coupon notes                        110.6         103.5
Other                                    336.7         549.0
Gross deferred tax liabilities         2,752.7       2,933.3

Net operating loss carryforwards        (306.0)       (241.5)
Postretirement benefits                 (248.3)       (268.0)
Self-insurance reserves                  (71.2)        (10.8)
Deferred state income taxes              (69.1)        (39.9)
Restructuring accruals                   (15.8)        (42.0)
Various accrued liabilities
 and other                              (551.2)       (686.8)
Gross deferred tax assets             (1,261.6)     (1,289.0)

Deferred tax assets
 valuation allowance                     319.3         249.0


Net deferred tax liability           $ 1,810.4     $ 1,893.3

Included in:
  Prepaid expenses, taxes and
   other current assets              $  (166.9)    $  (138.2)
  Other current liabilities                4.4          23.9
  Deferred income taxes                1,972.9       2,007.6

                                     $ 1,810.4     $ 1,893.3

 F-35
______________________________________________________________________________
      The  valuation allowance related to deferred tax assets increased  by
$70.3 million in 1994 primarily resulting from additions related to current
year  net operating losses, partially offset by reversals related to  prior
year  net  operating losses.  The net operating loss carryforwards  largely
related to a number of state and foreign jurisdictions and generally expire
over a range of dates.
        Deferred  tax  liabilities  have  not  been  recognized  for  bases
differences  related  to  investments in  foreign  subsidiaries  and  joint
ventures.    These  differences,  which  consist  primarily  of  unremitted
earnings  intended to be indefinitely reinvested, aggregated  approximately
$3.8  billion at year-end 1994 and $3.2 billion at year-end 1993, exclusive
of  amounts that if remitted in the future would result in little or no tax
under   current  tax  laws  and  the  Puerto  Rico  tax  incentive   grant.
Determination of the amount of unrecognized deferred tax liabilities is not
practicable.
       Tax  benefits  associated with exercises of stock options  of  $27.1
million  in  1994,  $23.4 million in 1993 and $57.5 million  in  1992  were
credited  to shareholders' equity.  A change in the functional currency  of
operations  in  Mexico  from  the U.S. dollar to  local  currency  in  1993
resulted  in  a  $19.3  million decrease in the net  deferred  foreign  tax
liability that was credited to shareholders' equity.

Note 18 - Employee Incentive Plans

PepsiCo  has  established certain employee incentive plans under  which
stock  options  are  granted.  A stock option  allows  an  employee  to
purchase  a share of PepsiCo Capital Stock (Stock) in the future  at  a
price equal to the fair market value on the date of the grant.
     Under  the PepsiCo SharePower Stock Option Plan, approved  by  the
Board  of  Directors and effective in 1989, essentially  all  employees
other  than  executive officers, part-time and short-service  employees
may  be  granted stock options annually.  The number of options granted
is  based  on  each employee's annual earnings.  The options  generally
become exercisable ratably over five years from the grant date and must
be  exercised  within 10 years of the grant date.   SharePower  options
were  granted  to  approximately 128,000  employees  in  1994,  118,000
employees in 1993 and 114,000 employees in 1992.
     The  shareholder-approved 1987 Long-Term Incentive Plan (the  1987
Plan), which has provisions similar to prior plans, provides incentives
to  eligible  senior and middle management employees.  In  addition  to
grants of stock options, which are generally exercisable between 1  and
15  years  from  the  grant date, the 1987 Plan allows  for  grants  of
performance share units (PSUs) to eligible senior management employees.
A  PSU is equivalent in value to a share of Stock at the grant date and
vests  for  payment  four years from the grant  date,  contingent  upon
attainment  of prescribed Corporate performance goals.   PSUs  are  not
directly  granted, as certain stock options granted may be  surrendered
by  employees  for a specified number of PSUs within  60  days  of  the
option   grant  date.   During  1994,  1,541,187  stock  options   were
surrendered  for 513,729 PSUs.  At year-end 1994, 1993 and 1992,  there
were 629,202, 491,200 and 484,698 outstanding PSUs, respectively.
     Grants  under  the  1987  Plan are approved  by  the  Compensation
Committee of the Board of Directors (the Committee), which is  composed
of  outside  directors.  Payment of awards other than stock options  is
made  in  cash and/or Stock as approved by the Committee,  and  amounts
expensed for such awards were $7 million, $5 million and $11 million in
1994,  1993 and 1992, respectively.  Under the 1987 Plan, a maximum  of
54 million shares of Stock can be purchased or paid pursuant to grants.

 F-36

There  were  7  million, 20 million, 22 million and 32  million  shares
available  for  future grants at year-end 1994, 1993,  1992  and  1991,
respectively.   The  Committee does not intend to grant  future  awards
under the 1987 Plan.
     On May 4, 1994, PepsiCo's shareholders approved the 1994 Long-Term
Incentive  Plan (the 1994 Plan).  The 1994 Plan continues the principal
features of the 1987 Plan and authorizes a maximum of 75 million shares
of  Stock  which  may be purchased or paid pursuant to  grants  by  the
Committee.   The  first  awards under the 1994 Plan  were  made  as  of
January 1, 1995.
    1994, 1993 and 1992 activity for the stock option plans included:
______________________________________________________________________________
(options in thousands)                  Long-Term
______________________________________________________________________________
Outstanding at December 28, 1991        23,801         27,834
Granted                                  8,477         12,653
Exercised                               (1,155)        (5,155)
Surrendered for PSUs                         -           (503)
Canceled                                (2,327)        (1,839)
Outstanding at December 26, 1992        28,796         32,990
Granted                                  9,121          2,834
Exercised                               (1,958)        (1,412)
Surrendered for PSUs                         -            (96)
Canceled                                (2,524)          (966)
Outstanding at December 25, 1993        33,435         33,350
Granted                                 11,633         16,237
Exercised                               (1,820)        (3,052)
Surrendered for PSUs                         -         (1,541)
Canceled                                (3,443)        (2,218)
Outstanding at December 31, 1994        39,805         42,776


Exercisable at December 31, 1994        16,115         18,439
                                        
                                        
Option prices per share:
  Exercised during 1994       $17.58 to $36.75    $4.11 to $38.75
  Exercised during 1993       $17.58 to $36.75    $4.11 to $36.31
  Exercised during 1992       $17.58 to $35.25    $4.11 to $29.88
  Outstanding at
    year-end 1994             $17.58 to $36.75    $7.69 to $42.81
______________________________________________________________________________
Note 19 - Contingencies

PepsiCo is subject to various claims and contingencies related to lawsuits,
taxes, environmental and other matters arising out of the normal course  of
business.   Management  believes that the ultimate liability,  if  any,  in
excess   of   amounts  already  provided  arising  from  such   claims   or
contingencies is not likely to have a material adverse effect on  PepsiCo's
annual results of operations or financial condition.  At year-end 1994  and
1993,  PepsiCo  was contingently liable under guarantees  aggregating  $187
million  and  $276  million, respectively.  The  guarantees  are  primarily
issued to support financial arrangements of certain PepsiCo joint ventures,
and   bottling  and  restaurant  franchisees.   PepsiCo  manages  the  risk
associated  with these guarantees by performing appropriate credit  reviews
in  addition  to  retaining certain rights as a joint  venture  partner  or
franchisor.  See Note 10 for information related to the fair value  of  the
guarantees.

 F-37

Management's Responsibility for Financial Statements

To Our Shareholders:

Management is responsible for the reliability of the consolidated financial
statements  and related notes, which have been prepared in conformity  with
generally accepted accounting principles and include amounts based upon our
estimates  and judgments, as required.  The financial statements have  been
audited and reported on by our independent auditors, KPMG Peat Marwick LLP,
who  were  given  free access to all financial records  and  related  data,
including  minutes of the meetings of the Board of Directors and Committees
of  the Board.  We believe that the representations made to the independent
auditors were valid and appropriate.

      PepsiCo  maintains  a  system  of  internal  control  over  financial
reporting designed to provide reasonable assurance as to the reliability of
the  financial statements.  The system is supported by formal policies  and
procedures, including an active Code of Conduct program intended to  ensure
employees  adhere  to  the highest standards of personal  and  professional
integrity.  PepsiCo's internal audit function monitors and reports  on  the
adequacy   of  and  compliance  with  the  internal  control  system,   and
appropriate  actions are taken to address significant control  deficiencies
and  other  opportunities for improving the system as they are  identified.
The Audit Committee of the Board of Directors, which is composed solely  of
outside  directors, provides oversight to the financial  reporting  process
through  periodic meetings with our independent auditors, internal auditors
and  management.  Both our independent auditors and internal auditors  have
free access to the Audit Committee.

      Although no cost effective internal control system will preclude  all
errors and irregularities, we believe our controls as of December 31,  1994
provide reasonable assurance that the financial statements are reliable.

/s/ WAYNE CALLOWAY
Wayne Calloway
Chairman of the Board
and Chief Executive Officer

/s/ ROBERT G. DETTMER
Robert G. Dettmer
Executive Vice President
and Chief Financial Officer

/s/ ROBERT L. CARLETON
Robert L. Carleton
Senior Vice President
and Controller

February 7, 1995

 F-38

Report of Independent Auditors

Board of Directors and Shareholders
PepsiCo, Inc.


We  have  audited the accompanying consolidated balance sheet  of  PepsiCo,
Inc.  and  Subsidiaries as of December 31, 1994 and December 25, 1993,  and
the related consolidated statements of income, cash flows and shareholders'
equity  for  each of the years in the three-year period ended December  31,
1994.   These  consolidated financial statements are the responsibility  of
PepsiCo, Inc.'s management.  Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the  audit  to
obtain reasonable assurance about whether the financial statements are free
of  material  misstatement.  An audit includes examining, on a test  basis,
evidence   supporting  the  amounts  and  disclosures  in   the   financial
statements.   An  audit  also includes assessing the accounting  principles
used  and  significant estimates made by management, as well as  evaluating
the  overall financial statement presentation.  We believe that our  audits
provide a reasonable basis for our opinion.

      In  our  opinion, the consolidated financial statements  referred  to
above  present fairly, in all material respects, the financial position  of
PepsiCo,  Inc.  and Subsidiaries as of December 31, 1994 and  December  25,
1993, and the results of its operations and its cash flows for each of  the
years in the three-year period ended December 31, 1994, in conformity  with
generally accepted accounting principles.

      As  discussed  in  Notes  14  and 13 to  the  consolidated  financial
statements,  PepsiCo, Inc. in 1994 adopted the provisions of the  Financial
Accounting  Standards  Board's Statement of Financial Accounting  Standards
No.  112, "Employers' Accounting for Postemployment Benefits," and  changed
its  method for calculating the market-related value of pension plan assets
used  in  the determination of pension expense, respectively.  As discussed
in  Notes 12 and 17 to the consolidated financial statements, PepsiCo, Inc.
in  1992  adopted  the  provisions  of the Financial  Accounting  Standards
Board's  Statements of Financial Accounting Standards No. 106,  "Employers'
Accounting for Postretirement Benefits Other Than Pensions," and  No.  109,
"Accounting for Income Taxes," respectively.

                                             KPMG Peat Marwick LLP

New York, New York
February 7, 1995

 F-39

______________________________________________________________________________
Selected Quarterly Financial Data (page 1 of 3)
(in millions except per share amounts, unaudited)
PepsiCo, Inc. and Subsidiaries                     First Quarter
                                                    (12 Weeks)
                                                   1994 (a)      1993
______________________________________________________________________________
Net sales                                      $5,728.9       5,091.6
Gross profit                                   $2,944.4       2,641.4
Operating profit                               $  550.5         506.0
Income before income taxes and cumulative
 effect of accounting changes                  $  438.4         391.6
Provision for income taxes                     $  155.6         131.2
Income before cumulative effect of
 accounting changes                            $  282.8         260.4
Cumulative effect of accounting changes (b)    $  (32.0)            -
Net income                                     $  250.8         260.4
Income (charge) per share:
  Income before cumulative effect of
   accounting changes                          $   0.35          0.32
  Cumulative effect of accounting
   changes (b)                                 $  (0.04)            -
Net income per share                           $   0.31          0.32
______________________________________________________________________________
                                                  Second Quarter
                                                    (12 Weeks)
                                               1994 (a)(c)       1993
______________________________________________________________________________
Net sales                                      $6,557.0       5,890.3
Gross profit                                   $3,419.5       3,102.8
Operating profit                               $  785.0         750.4
Income before income taxes                     $  672.2         635.7
Provision for income taxes                     $  225.7         208.9
Net income                                     $  446.5         426.8
Net income per share                           $   0.55          0.53
______________________________________________________________________________

(a)  Included  the  current  year  benefit  of  changing  the  method   for
     calculating   the  market-related  value  of  plan  assets   used   in
     determining  the  return-on-asset component of annual pension  expense
     and   the  cumulative  net  unrecognized  gain  or  loss  subject   to
     amortization, which reduced full-year pension expense by $35.1  ($21.6
     after-tax or $0.03 per share).  This benefit was prorated over each of
     the four quarters.  See Note 13.
(b)  Represented the cumulative net effect related to years prior  to  1994
     of  adopting  SFAS  112,  "Employers'  Accounting  for  Postemployment
     Benefits,"  and the change in the method for calculating  the  market-
     related  value  of  pension  plan  assets.   See  Notes  14  and   13,
     respectively.
(c)  Included  a  $17.8 gain ($16.8 after-tax or $0.02 per  share)  arising
     from a public share offering by PepsiCo's BAESA joint venture in South
     America.  See Note 4.

 F-40
______________________________________________________________________________
Selected Quarterly Financial Data (page 2 of 3)
(in millions except per share amounts, unaudited)
PepsiCo, Inc. and Subsidiaries                     Third Quarter
                                                    (12 Weeks)
                                                  1994 (a)       1993 (d)
______________________________________________________________________________
Net sales                                      $ 7,064.0      6,316.4
Gross profit                                   $ 3,684.0      3,322.1
Operating profit                               $   961.7        851.6
Income before income taxes                     $   830.3        736.5
Provision for income taxes                     $   288.9        278.3
Net income                                     $   541.4        458.2
Net income per share                           $    0.68         0.56
______________________________________________________________________________
                                                  Fourth Quarter
                                                (17/16 Weeks) (e)
                                                 1994 (a)        1993
______________________________________________________________________________
Net sales                                      $ 9,122.5      7,722.4
Gross profit                                   $ 4,709.1      4,008.3
Operating profit                               $   904.0        798.5
Income before income taxes                     $   723.5        658.7
Provision for income taxes                     $   210.2        216.2
Net income                                     $   513.3        442.5
Net income per share                           $    0.64         0.55
______________________________________________________________________________

(a)  Included  the  current  year  benefit  of  changing  the  method   for
     calculating   the  market-related  value  of  plan  assets   used   in
     determining  the  return-on-asset component of annual pension  expense
     and   the  cumulative  net  unrecognized  gain  or  loss  subject   to
     amortization, which reduced full-year pension expense by $35.1  ($21.6
     after-tax or $0.03 per share).  This benefit was prorated over each of
     the four quarters.  See Note 13.
(d)  Included a $29.9 charge ($0.04 per share) to increase net deferred tax
     liabilities as of the beginning of 1993 for a 1% statutory income  tax
     rate increase due to 1993 U.S. tax legislation.  See Note 17.
(e)  Fiscal years 1994 and 1993 consisted of 53 and 52 weeks, respectively.
     The estimated favorable impact of the 53rd week on 1994 fourth quarter
     and full-year earnings was $54.0 ($34.9 after-tax or $0.04 per share).

 F-41

______________________________________________________________________________
Selected Quarterly Financial Data (page 3 of 3)
(in millions except per share amounts, unaudited)
PepsiCo, Inc. and Subsidiaries                       Full Year
                                                (53/52 Weeks) (e)
                                                  1994 (a)(c) 1993 (d)
______________________________________________________________________________
Net sales                                      $28,472.4     25,020.7
Gross profit                                   $14,757.0     13,074.6
Operating profit                               $ 3,201.2      2,906.5
Income before income taxes and cumulative
 effect of accounting changes                  $ 2,664.4      2,422.5
Provision for income taxes                     $   880.4        834.6
Income before cumulative effect of
 accounting changes                            $ 1,784.0      1,587.9
Cumulative effect of accounting changes (b)    $   (32.0)           -
Net income                                     $ 1,752.0      1,587.9
Income (charge) per share:
  Income before cumulative effect of
   accounting changes                          $    2.22         1.96
  Cumulative effect of accounting
   changes (b)                                 $   (0.04)           -
Net income per share                           $    2.18         1.96
______________________________________________________________________________

(a)  Included  the  current  year  benefit  of  changing  the  method   for
     calculating   the  market-related  value  of  plan  assets   used   in
     determining  the  return-on-asset component of annual pension  expense
     and   the  cumulative  net  unrecognized  gain  or  loss  subject   to
     amortization, which reduced full-year pension expense by $35.1  ($21.6
     after-tax or $0.03 per share).  This benefit was prorated over each of
     the four quarters.  See Note 13.
(b)  Represented the cumulative net effect related to years prior  to  1994
     of  adopting  SFAS  112,  "Employers'  Accounting  for  Postemployment
     Benefits,"  and the change in the method for calculating  the  market-
     related  value  of  pension  plan  assets.   See  Notes  14  and   13,
     respectively.
(c)  Included  a  $17.8 gain ($16.8 after-tax or $0.02 per  share)  arising
     from a public share offering by PepsiCo's BAESA joint venture in South
     America.  See Note 4.
(d)  Included a $29.9 charge ($0.04 per share) to increase net deferred tax
     liabilities as of the beginning of 1993 for a 1% statutory income  tax
     rate increase due to 1993 U.S. tax legislation.  See Note 17.
(e)  Fiscal years 1994 and 1993 consisted of 53 and 52 weeks, respectively.
     The estimated favorable impact of the 53rd week on 1994 fourth quarter
     and full-year earnings was $54.0 ($34.9 after-tax or $0.04 per share).

 F-42
____________________________________________________________________________
Selected Financial Data (Page 1 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
____________________________________________________________________________
                                                    Growth Rates
                                               Compounded       Annual

                                           10-Year    5-Year    1-Year
                                           1984-94   1989-94   1993-94
Summary of Operations
Net sales                                  15.0%     13.6%     13.8%
Cost of sales and operating expenses          -         -         -
Operating profit                           18.6%     12.5%     10.1%
Gain on joint venture stock offering(h)       -         -         -
Interest expense                              -         -         -
Interest income                               -         -         -
Income from continuing operations before
 income taxes and cumulative effect of
 accounting changes                        19.2%     14.7%     10.0%
Provision for income taxes                    -         -         -
Income from continuing operations before
 cumulative effect of accounting changes   20.3%     14.6%     12.3%
Cumulative effect of accounting
 changes (i)                                  -         -         -
Net income (j)                             23.5%     14.2%     10.3%
Per Share Data
  Income from continuing operations before
   cumulative effect of accounting
   changes                                 21.0%     14.5%     13.3%
  Cumulative effect of accounting
   changes (i)                                -         -         -
  Net income (j)                           24.2%     14.0%     11.2%
  Cash dividends declared                  14.2%     16.9%     14.8%
Average shares and equivalents
 outstanding                                  -         -         -

Cash Flow Data (k)
Net cash provided by continuing
 operations                                14.2%     14.5%     18.6%
Cash acquisitions and investments in
 affiliates                                   -         -         -
Cash capital spending                      15.0%     19.0%     13.7%
Cash dividends paid                        13.3%     17.4%     17.0%

Year-End Position
Total assets                               17.7%     10.4%      4.6%
Long-term debt                             29.5%      7.8%     18.8%
Total debt (l)                             25.9%      6.5%     (1.2)%
Shareholders' equity                          -         -         -
  Per share                                14.8%     12.0%      9.3%
Market price per share                     22.9%     11.1%    (13.4)%
Shares outstanding                            -         -         -
Employees                                  12.1%     12.1%     11.3%
Statistics
Return on average shareholders'
 equity (m)
Market net debt ratio (n)
Historical cost net debt ratio (o)

 F-43
____________________________________________________________________________
Selected Financial Data (Page 2 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
____________________________________________________________________________
                                          1994(a)(b)  1993(c)     1992(d)
____________________________________________________________________________
Summary of Operations
Net sales                                $28,472.4  25,020.7     21,970.0
Cost of sales and operating expenses      25,271.2  22,114.2     19,598.8
Operating profit                           3,201.2   2,906.5      2,371.2
Gain on joint venture stock offering(h)       17.8         -            -
Interest expense                            (645.0)   (572.7)      (586.1)
Interest income                               90.4      88.7        113.7
Income from continuing operations before
 income taxes and cumulative effect of
 accounting changes                        2,664.4   2,422.5      1,898.8
Provision for income taxes                   880.4     834.6        597.1
Income from continuing operations before
 cumulative effect of accounting changes $ 1,784.0   1,587.9      1,301.7
Cumulative effect of accounting
 changes (i)                             $   (32.0)        -       (927.4)
Net income (j)                           $ 1,752.0   1,587.9        374.3
Per Share Data
  Income from continuing operations before
   cumulative effect of accounting
   changes                               $    2.22      1.96         1.61
  Cumulative effect of accounting
   changes (i)                           $   (0.04)        -        (1.15)
  Net income (j)                         $    2.18      1.96         0.46
  Cash dividends declared                $   0.700     0.610        0.510
Average shares and equivalents
 outstanding                                 803.6     810.1        806.7

Cash Flow Data (k)
Net cash provided by continuing
 operations                              $ 3,716.0   3,134.4      2,711.6
Cash acquisitions and investments in
 affiliates                              $   315.8   1,011.2      1,209.7
Cash capital spending                    $ 2,253.2   1,981.6      1,549.6
Cash dividends paid                      $   540.2     461.6        395.5

Year-End Position
Total assets                             $24,792.0  23,705.8     20,951.2
Long-term debt                           $ 8,840.5   7,442.6      7,964.8
Total debt (l)                           $ 9,519.0   9,633.8      8,671.6
Shareholders' equity                     $ 6,856.1   6,338.7      5,355.7
  Per share                              $    8.68      7.94         6.70
Market price per share                   $  36 1/4    41 7/8       42 1/4
Shares outstanding                           789.9     798.8        798.8
Employees                                  471,000   423,000      372,000
Statistics
Return on average shareholders'
 equity (m)                                   27.0%     27.2         23.9
Market net debt ratio (n)                       26%       22           19
Historical cost net debt ratio (o)              49%       50           49

 F-44
_____________________________________________________________________________
Selected Financial Data (Page 3 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
_____________________________________________________________________________
                                            1991(e)    1990(f)      1989
_____________________________________________________________________________
Summary of Operations
Net sales                                $19,292.2  17,515.5     15,049.2
Cost of sales and operating expenses      17,180.4  15,473.4     13,276.6
Operating profit                           2,111.8   2,042.1      1,772.6
Gain on joint venture stock offering(h)          -     118.2            -
Interest expense                            (613.7)   (686.0)      (607.9)
Interest income                              161.6     179.5        175.3
Income from continuing operations before
 income taxes and cumulative effect of
 accounting changes                        1,659.7   1,653.8      1,340.0
Provision for income taxes                   579.5     563.2        438.6
Income from continuing operations before
 cumulative effect of accounting
 changes                                 $ 1,080.2   1,090.6        901.4
Cumulative effect of accounting
 changes (i)                             $       -         -            -
Net income (j)                           $ 1,080.2   1,076.9        901.4
Per Share Data
  Income from continuing operations before
   cumulative effect of accounting
   changes                               $    1.35      1.37         1.13
  Cumulative effect of accounting
   changes (i)                           $       -         -            -
  Net income (j)                         $    1.35      1.35         1.13
  Cash dividends declared                $   0.460     0.383        0.320
Average shares and equivalents
 outstanding                                 802.5     798.7        796.0

Cash Flow Data (k)
Net cash provided by continuing
 operations                              $ 2,430.3   2,110.0      1,885.9
Cash acquisitions and investments in
 affiliates                              $   640.9     630.6      3,296.6
Cash capital spending                    $ 1,457.8   1,180.1        943.8
Cash dividends paid                      $   343.2     293.9        241.9

Year-End Position
Total assets                             $18,775.1  17,143.4     15,126.7
Long-term debt                           $ 7,806.2   5,899.6      6,076.5
Total debt (l)                           $ 8,034.4   7,526.1      6,942.8
Shareholders' equity                     $ 5,545.4   4,904.2      3,891.1
  Per share                              $    7.03      6.22         4.92
Market price per share                   $  33 3/4    25 3/4       21 3/8
Shares outstanding                           789.1     788.4        791.1
Employees                                  338,000   308,000      266,000
Statistics
Return on average shareholders'
 equity (m)                                   20.7%     24.8         25.6
Market net debt ratio (n)                       21%       24           26
Historical cost net debt ratio (o)              51%       51           54

 F-45

____________________________________________________________________________
Selected Financial Data (Page 4 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
____________________________________________________________________________
                                            1988(b)    1987         1986
____________________________________________________________________________
Summary of Operations
Net sales                                $12,381.4  11,018.1      9,017.1
Cost of sales and operating expenses      11,039.6   9,890.5      8,187.9
Operating profit                           1,341.8   1,127.6        829.2
Gain on joint venture stock offering(h)          -         -            -
Interest expense                            (342.4)   (294.6)      (261.4)
Interest income                              120.5     112.6        122.7
Income from continuing operations before
 income taxes and cumulative effect of
 accounting changes                        1,119.9     945.6        690.5
Provision for income taxes                   357.7     340.5        226.7
Income from continuing operations before
 cumulative effect of accounting
 changes                                 $   762.2     605.1        463.8
Cumulative effect of accounting
 changes (i)                             $       -         -            -
Net income (j)                           $   762.2     594.8        457.8
Per Share Data
  Income from continuing operations before
   cumulative effect of accounting
   changes                               $    0.97      0.77         0.59
  Cumulative effect of accounting
   changes (i)                           $       -         -            -
  Net income (j)                         $    0.97      0.76         0.58
  Cash dividends declared                $   0.267     0.223        0.209
Average shares and equivalents
 outstanding                                 790.4     789.3        786.5

Cash Flow Data (k)
Net cash provided by continuing
 operations                              $ 1,894.5   1,334.5      1,212.2
Cash acquisitions and investments in
 affiliates                              $ 1,415.5     371.5      1,679.9
Cash capital spending                    $   725.8     770.5        858.5
Cash dividends paid                      $   199.0     172.0        160.4

Year-End Position
Total assets                             $11,135.3   9,022.7      8,027.1
Long-term debt                           $ 2,656.0   2,579.2      2,632.6
Total debt (l)                           $ 4,107.0   3,225.1      2,865.3
Shareholders' equity                     $ 3,161.0   2,508.6      2,059.1
  Per share                              $    4.01      3.21         2.64
Market price per share                   $  13 1/8    11 1/4        8 3/4
Shares outstanding                           788.4     781.2        781.0
Employees                                  235,000   225,000      214,000
Statistics
Return on average shareholders'
 equity(m)                                    26.9%     26.5         23.8
Market net debt ratio (n)                       24%       22           28
Historical cost net debt ratio (o)              43%       41           46

 F-46

____________________________________________________________________________
Selected Financial Data (Page 5 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
____________________________________________________________________________
                                             1985       1984(g)
____________________________________________________________________________
Summary of Operations
Net sales                                $7,584.5    7,058.6
Cost of sales and operating expenses      6,802.4    6,479.3
Operating profit                            782.1      579.3
Gain on joint venture stock offering(h)         -          -
Interest expense                           (195.2)    (204.9)
Interest income                              96.4       86.1
Income from continuing operations before
 income taxes and cumulative effect of
 accounting changes                         683.3      460.5
Provision for income taxes                  256.7      180.5
Income from continuing operations before
 cumulative effect of accounting
 changes                                 $  426.6      280.0 
 Cumulative effect of accounting
 changes (i)                             $      -          -
Net income (j)                           $  543.7      212.5
Per Share Data
  Income from continuing operations before
   cumulative effect of accounting
   changes                               $   0.51       0.33
  Cumulative effect of accounting
   changes (i)                           $      -          -
  Net income (j)                         $   0.65       0.25
  Cash dividends declared                $  0.195      0.185
Average shares and equivalents
 outstanding                                842.1      862.4

Cash Flow Data (k)
Net cash provided by continuing
 operations                              $  817.3      981.5
Cash acquisitions and investments in
 affiliates                              $  160.0          -
Cash capital spending                    $  770.3      555.8
Cash dividends paid                      $  161.1      154.6

Year-End Position
Total assets                             $5,889.3    4,876.9
Long-term debt                           $1,162.0      668.1
Total debt (l)                           $1,506.1      948.9
Shareholders' equity                     $1,837.7    1,853.4
  Per share                              $   2.33       2.19
Market price per share                   $  7 7/8      4 5/8
Shares outstanding                          789.4      845.2
Employees                                 150,000    150,000
Statistics
Return on average shareholders'
 equity(m)                                   23.1%      15.4
Market net net debt ratio (n)                  15%        12
Historical cost net debt ratio (o)             30%        17

 F-47

___________________________________________________________________________
Selected Financial Data (Page 6 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
___________________________________________________________________________

All share and per share amounts reflect three-for-one stock splits in 1990
and  1986.  Additionally, PepsiCo made numerous acquisitions in most  years
presented  and a few divestitures in certain years.  Such transactions  did
not  materially affect the comparability of PepsiCo's operating results for
the  periods presented, except for certain large acquisitions made in 1986,
1988 and 1989, and the divestitures discussed in Notes (g) and (j).

(a)  Included  the  current  year  benefit  of  changing  the  method   for
     calculating  the  market-related value of plan assets,  which  reduced
     full-year  pension  expense by $35.1 ($21.6  after-tax  or  $0.03  per
     share).  See Note 13.
(b)  Fiscal  years  1994  and 1988 each consisted of 53  weeks.   Normally,
     fiscal  years  consist of 52 weeks; however, because the  fiscal  year
     ends  on the last Saturday in December, a week is added every 5  or  6
     years.   The 53rd week increased 1994 earnings by approximately  $54.0
     ($34.9   after-tax   or  $0.04  per  share)  and  1988   earnings   by
     approximately $23.2 ($15.7 after-tax or $0.02 per share).
(c)  Included a $29.9 charge ($0.04 per share) to increase net deferred tax
     liabilities as of the beginning of 1993 for a 1% statutory income  tax
     rate increase due to 1993 U.S. tax legislation.  See Note 17.
(d)  Included $193.5 in unusual charges for restructuring ($128.5 after-tax
     or $0.16 per share).  See Note 2 on page F-9 and Note 16.
(e)  Included  $170.0  in unusual charges ($119.8 after-tax  or  $0.15  per
     share).  See Note 2 on page F-9.
(f)  Included  $83.0  in  unusual charges ($48.8  after-tax  or  $0.06  per
     share).  See Note 2 on page F-9.
(g)  Included a $156.0 unusual charge ($62.0 after-tax or $0.07 per  share)
     related   to   a  program  to  sell  several  international   bottling
     operations.
(h)  The $17.8 gain ($16.8 after-tax or $0.02 per share) in 1994 arose from
     a  public  share  offering by PepsiCo's BAESA joint venture  in  South
     America.   See Note 4.  The $118.2 gain ($53.0 after-tax or $0.07  per
     share) in 1990 arose from an initial public offering of new shares  by
     a KFC joint venture in Japan and a sale by PepsiCo of a portion of its
     shares.
(i)  Represents  the  cumulative  effect of  adopting  in  1994  SFAS  112,
     "Employers' Accounting for Postemployment Benefits," and changing  the
     method for calculating the market-related value of plan assets used in
     determining  the  return-on-asset component of annual pension  expense
     and   the  cumulative  net  unrecognized  gain  or  loss  subject   to
     amortization (see Notes 14 and 13, respectively) and adopting in  1992
     SFAS  106,  "Employers' Accounting for Postretirement  Benefits  Other
     Than Pensions," and SFAS 109, "Accounting for Income Taxes" (see Notes
     12  and  17, respectively).  Prior years were not restated  for  these
     changes in accounting.
(j)  Included  impacts of discontinued operations, the most significant  of
     which were in 1985 and 1984.  1985 included income of $123.6 after-tax
     ($0.15  per share) and 1984 included charges of $62.5 after-tax ($0.07
     per  share) resulting from PepsiCo disposing of its sporting goods and
     transportation segments.

 F-48
____________________________________________________________________________
Selected Financial Data (Page 7 of 7)
(in millions except per share and employee amounts, unaudited)
PepsiCo, Inc. and Subsidiaries
_____________________________________________________________________________
(k)  Cash  flows from other investing and financing activities,  which  are
     not presented, are an integral part of total cash flow activity.
(l)  Total  debt  includes short-term borrowings and long-term debt,  which
     for 1987 through 1990 included a nonrecourse obligation.
(m)  The  return on average shareholders' equity is calculated using income
     from  continuing  operations before cumulative  effect  of  accounting
     changes.
(n)  The market net debt ratio represents net debt as a percent of net debt
     plus  the  market value of equity, based on the year-end stock  price.
     Net  debt  is total debt, which for this purpose includes the  present
     value  of  long-term operating lease commitments, reduced by  the  pro
     forma  remittance of investment portfolios held outside the U.S.   For
     1987  through  1990,  total debt was also reduced by  the  nonrecourse
     obligation in the calculation of net debt.
(o)  The historical cost net debt ratio represents net debt (see Note n) as
     a  percent of capital employed (net debt, other liabilities,  deferred
     income taxes and shareholders' equity).

 F-49


                      PEPSICO, INC. AND SUBSIDIARIES
                                     
        SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
  Years Ended December 31, 1994, December 25, 1993 and December 26, 1992
                               (in millions)


                                       Additions

                         Balance   Charged             Deduct-   Balance
                            at        to                 ions      at
                         beginning costs and   Other     from      end
                         of year   expenses  additions reserves  of year
                                               (1)        (2)

Deductions from assets:

1994

Allowance for
 doubtful accounts       $128.3    $ 59.4    $  7.6    $ 44.7    $150.6

Valuation allowance for
 deferred tax assets     $249.0    $ 69.4    $  0.9    $    -    $319.3


1993

Allowance for
 doubtful accounts       $112.0    $ 43.9    $ 16.7    $ 44.3    $128.3


Valuation allowance for
 deferred tax assets     $181.3    $ 67.7    $    -    $    -    $249.0


1992

Allowance for
 doubtful accounts       $ 97.5    $ 46.3    $ 14.1    $ 45.9    $112.0

Valuation allowance for
 deferred tax assets     $142.8    $ 38.5    $    -    $    -    $181.3

(1)  Other additions to the allowance for doubtful accounts principally
     related to acquisitions and reclassifications.
(2)  Principally accounts written off.

 E-1

                             INDEX TO EXHIBITS
                               ITEM 14(a)(3)
EXHIBIT

(3)(a)    Restated  Articles of Incorporation of PepsiCo,  Inc.,  which  is
          incorporated  herein by reference from Exhibit 4(a) to  PepsiCo's
          Registration Statement on Form S-3 (Registration No. 33-57181).

(3)(b)    Copy   of  By-Laws  of  PepsiCo,  Inc.,  as  amended,  which   is
          incorporated by reference from Exhibit 3(ii) to PepsiCo's  Annual
          Report on Form 10-K for the fiscal year ended December 26, 1992.

(4)       PepsiCo,  Inc. agrees to furnish to the Securities  and  Exchange
          Commission,  upon request, a copy of any instrument defining  the
          rights  of holders of long-term debt of PepsiCo, Inc. and all  of
          its   subsidiaries  for  which  consolidated  or   unconsolidated
          financial statements are required to be filed with the Securities
          and Exchange Commission.

(10)(a)   Description of PepsiCo, Inc. 1988 Director Stock Plan,  which  is
          incorporated  herein  by reference from Post-Effective  Amendment
          No.   2   to   PepsiCo's  Registration  Statement  on  Form   S-8
          (Registration No. 33-22970).

(10)(b)   Copy  of  PepsiCo,  Inc. 1987 Incentive Plan (the  "1987  Plan"),
          which  is  incorporated  by  reference  from  Exhibit  10(b)   to
          PepsiCo's Annual Form 10-K for the Fiscal Year ended December 26,
          1992.

(10)(c)   Copy of PepsiCo, Inc. 1979 Incentive Plan (the "Plan"), which  is
          incorporated by reference from Exhibit 10(c) to PepsiCo's  Annual
          Report on Form 10-K for the Fiscal year ended December 28, 1991.

(10)(d)   Copy of Operating Guideline No. 1 under the 1987 Plan, as amended
          through July 25, 1991, which  is incorporated  by reference  from
          Exhibit  10(d) to PepsiCo's Annual Report on Form  10-K  for  the
          fiscal year ended December 28, 1991.

(10)(e)   Copy  of  Operating Guideline No. 2 under the 1987 Plan  and  the
          Plan,  as amended through January 22, 1987, which is incorporated
          herein  by reference from Exhibit 28(b) to PepsiCo's Registration
          Statement on Form S-8 (Registration No. 33-19539).

(10)(f)   Amended  and  Restated PepsiCo Long Term Savings  Program,  dated
          June 29, 1994

(10)(g)   Amendment  to  Amended  and Restated PepsiCo  Long  Term  Savings
          Program, dated September 14, 1994.

(10)(h)   Copy  of  PepsiCo, Inc. 1994 Long-Term Incentive Plan,  which  is
          incorporated  herein  by reference from Exhibit  A  to  PepsiCo's
          Proxy Statement for its 1994 Annual Meeting of Shareholders.

(10)(i)   Copy  of  PepsiCo,  Inc. Executive Incentive  Compensation  Plan,
          which is incorporated herein by reference  from  Exhibit B to 
          PepsiCo's Proxy Statement  for  its 1994 Annual Meeting of 
          Shareholders.

(11)      Computation  of Net Income Per Share of Capital Stock ---- Primary
          and Fully Diluted.

(12)      Computation of Ratio of Earnings to Fixed Charges.

(21)      Active Subsidiaries of PepsiCo, Inc.

(23)      Report and Consent of KPMG Peat Marwick LLP.

(24)      Copy of Power of Attorney.

(27)      Financial Data Schedule



                    PEPSICO LONG TERM SAVINGS PROGRAM





                       As Amended and Restated

            Effective July 1, 1992, Except as Otherwise Noted
         [Subject to Approval by the Internal Revenue Service]




                  PEPSICO LONG TERM SAVINGS PROGRAM

                         Table of Contents

                                                       Page


ARTICLE I      Foreword                                 I-1

ARTICLE II     Definitions and Construction             
     2.1            Definitions                         II-1
     2.2            Construction                        II-18

ARTICLE III    Eligibility and Participation             
     3.1            Eligibility                         III-1
     3.2            Participation                       III-1

ARTICLE IV     Contributions and Deferral Amounts
     4.1            Deferral Amount                     IV-1
     4.2            Dollar Limits on Elective 
                      Deferrals                         IV-2 
     4.3            Limitation on Deferral Percentage   IV-4
     4.4            Rollover Contributions              IV-8
     4.5            Maximum Allocations                 IV-8
     4.6            Excess Allocations                  IV-15
     4.7            Fund for Exclusive Benefit
                      of Participants                   IV-16

ARTICLE V       Interests of Participants
     5.1            Accounts of Participants            V-1
     5.2            Investment of Participant Accounts  V-1
     5.3            Adjusting Account Balances          V-11

ARTICLE VI     Distributions to Participants
     6.1            Termination of Employment           VI-1
     6.2            Death                               VI-1
     6.3            Withdrawals                         VI-1
     6.4            Form of Distributions               VI-4
     6.5            Errors in Participant's Accounts    VI-5
     6.6            Commencement of Payments            VI-5
     6.7            Payment for Benefit of Disabled
                      or Incapacitated Person           VI-8
     6.8            No Other Benefits or Withdrawals    VI-8

ARTICLE VII    Plan Loans
     7.1            Eligibility for Plan Loans          VII-1
     7.2            Application Procedure               VII-1
     7.3            Loan Amount                         VII-2
     7.4            Maximum Number of Outstanding Loans
                      and Refinancing                   VII-3
     7.5            Effect on Participant's Investment  VII-3
     
     
     

     7.6            Fees                                VII-4
     7.7            Interest Rate                       VII-4
     7.8            Term and Repayment                  VII-5
     7.9            Loan Default                        VII-6
     7.10           Nondiscrimination                   VII-6
     7.11           Collins Food International, Inc.    VII-6
     7.12           Miscellaneous                       VII-7

ARTICLE VIII   Determination of Beneficiary
     8.1            Certain Married Participants        VIII-1
     8.2            Other Participants                  VIII-3

ARTICLE IX     Administration
     9.1            Allocation of Responsibility Among
                      Fiduciaries for Plan and Trust
                      Administration                     IX-1
     9.2            Administration                       IX-1
     9.3            Claims Procedure                     IX-2
     9.4            Records and Reports                  IX-3
     9.5            Other Administrative Powers
                      and Duties                         IX-3
     9.6            Rules and Decisions                  IX-4
     9.7            Procedures                           IX-4
     9.8            Authorization of Benefit
                      Distributions                      IX-4
     9.9            Application and Forms for
                      Distributions                      IX-4

ARTICLE X     Trust Fund                                 X-1

ARTICLE XI     Amendment of the Plan                     XI-1

ARTICLE XII    Termination of the Plan                   XII-1

ARTICLE XIII   Miscellaneous

     13.1           Participants' Rights; Acquittance    XIII-1
     13.2           Nonalienation of Benefits            XIII-1
     13.3           Actions Involving the Trust          XIII-2
     13.4           Qualification of Plan as a Condition XIII-3
     13.5           Successor to the Company             XIII-3
     13.6           Transfer of Plan Assets              XIII-4
     13.7           Indemnification                      XIII-4
     13.8           Action by the Company                XIII-4
     13.9           Applicable Law                       XIII-5
     13.10          Interpreting the Plan                XIII-5

ARTICLE XIV    Top-Heavy Plan Provisions
     14.1           Application                          XIV-1



     14.2           Definitions                          XIV-1
     14.3           Allocation of Minimum Contribution   XIV-2

ARTICLE XV     Signature                                  XV-1

APPENDIX                                               Appendix
  Article A         KFC-Collins                           A-1
  Article B         KFC Hourly Employees                  B-1
  Article C         Pizza Hut Hourly Employees            C-1
  Article D         Prior Definitions of Eligible Pay     D-1

SCHEDULE 1     Designated Employers for Nonrestaurant 
                    Salaried Employees                    1-1

SCHEDULE 2     Designated Employers for Nonrestaurant 
                    Hourly and Commissioned Employees     2-1 
                                                           
SCHEDULE 3     Designated Employers for Restaurant
                         Employees                        3-1

SCHEDULE 4     Designated Employers for Transportation
                         Employees                        4-1

SCHEDULE 5     Designated Hourly Employees of the
                         Company                          5-1

 I-1

                             ARTICLE I

                             Foreword

          The PepsiCo Long Term Savings Program permits eligible
employees to defer receipt of a portion of their Eligible Pay in
order to promote savings on a tax-favored basis.  The Plan
provides for distributions in the event of termination of
employment, death, or attainment of age 59-1/2.  In addition, in
certain circumstances, withdrawals are permitted in the event of
hardship.

          The Plan has been established by PepsiCo, Inc. for the
benefit of its salaried Employees and certain union employees and
certain salaried, commissioned sales and hourly Employees of each
subsidiary designated by PepsiCo, Inc. which adopts this Plan as
an Employer.

           The PepsiCo Long Term Savings Program was initially
established effective July  1, 1983, and was subsequently
amended.  Effective December 31, 1991, the Kentucky Fried Chicken
Corporation Long Term Savings Program, the Pizza Hut Long Term
Savings Program, the Pepsi-Cola Operating Company Long Term
Savings Program and the Taco Bell Long Term Savings Program (the
"Merged Plans") were merged into the PepsiCo Long Term Savings
Program (the "Plan").  The Plan was amended and restated
effective July 1, 1992.  Except as otherwise provided herein,
this amendment and restatement is effective as of July 1, 1992
and applies to persons who are Participants in the Plan on or
after that date.  Except as so provided, the rights and benefits
with respect to persons who terminated participation in the Plan
or the Merged Plans prior to that date shall be governed by the
prior provisions of the Plan and the Merged Plans.  The
provisions set forth in the following Articles apply to all
Participants except to the extent otherwise provided.  To provide
for the investment of contributions to this Plan and other tax-
favored savings plans maintained by it and its subsidiaries and
affiliates, PepsiCo, Inc. has established the Master Trust
described in Article X.

 II-1
                           ARTICLE II

                  Definitions and Construction

          2.1  Definitions:  This section provides definitions
for certain words and phrases listed below.  These definitions
can be found on the pages indicated.

                                                            Page

          (a)       Account                                 II-2
          (b)       Authorized Leaves of Absence            II-2
          (c)       Annuity Starting Date                   II-2
          (d)       Beneficiary                             II-2
          (e)       Board                                   II-2
          (f)       Code                                    II-2
          (g)       Company                                 II-2
          (h)       Company Stock                           II-2
          (i)       Effective Date                          II-3
          (j)       Elective Deferral                       II-3
          (k)       Eligible Pay                            II-3
          (l)       Employee                                II-10
          (m)       Employer                                II-10
          (n)       Employment                              II-11
          (o)       Employment Commencement Date            II-11
          (p)       ERISA                                   II-11
          (q)       Excess Contributions                    II-11
          (r)       Excess Elective Deferrals               II-11
          (s)       Fiduciaries                             II-11
          (t)       Highly Compensated Employee             II-12
          (u)       Hour of Service                         II-14
          (v)       Investment Expense                      II-14
          (w)       Limitation Year                         II-14
          (x)       Merged Plans                            II-14
          (y)       Non-Highly Compensated Employee         II-15
          (z)       Participant                             II-15
                    (1)  Active Participant                 II-15
                    (2)  Inactive Participant               II-15
          (aa)      PepsiCo Organization                    II-15
          (bb)      Plan                                    II-15
          (cc)      Plan Administrator                      II-15
          (dd)      Plan Year                               II-15
          (ee)      Recordkeeper                            II-15
          (ff)      Retired Employee                        II-16
          (gg)      Rollover Account                        II-16
          (hh)      Rollover Contributions                  II-16

  II-2

          (ii)      Salary Deferral Account                 II-16
          (jj)      Salary Deferral Contributions           II-16
          (kk)      Severance from Service Date             II-16
          (ll)      Termination of Employment               II-17
          (mm)      Trust (or Trust Fund)                   II-17
          (nn)      Trustee                                 II-17
          (oo)      Valuation Date                          II-17
          (pp)      Year of Service                         II-17

Where the following words and phrases in bold face and underlined
appear in this Plan with initial capitals they shall have the
meaning set forth below, unless a different meaning is plainly
required by context.

          (a)  ACCOUNT: A Participant's total interest in the
Plan, the aggregate of the Participant's Salary Deferral Account
and Rollover Account (and any other accounts that may be provided
for in the Appendix).

          (b)  AUTHORIZED LEAVES OF ABSENCE:  Any absence: (i)
that is authorized by an Employer under its standard personnel
practices; and (ii) during which the individual's base pay is
continued by the Employer.  It is intended that all persons under
similar circumstances shall be treated alike in the granting of
such Authorized Leaves of Absence.

          (c)  ANNUITY STARTING DATE:  The first day on which all
events have occurred that entitle the Participant to payment of a
benefit.

          (d)  BENEFICIARY:  Any person or persons (natural or
otherwise) determined under Article VIII to be entitled to
receive benefits hereunder upon the death of a Participant.

          (e)  BOARD:  The Board of Directors of the Company.

          (f)  CODE:  The Internal Revenue Code of 1986, as
amended from time to time.

          (g)  COMPANY:  PepsiCo, Inc., a corporation organized
and existing under the laws of the State of North Carolina, or
its successor or successors.

          (h)  COMPANY STOCK:  The capital stock issued by the
Company.

 II-3

          (i)  EFFECTIVE DATE:  The date upon which this
amendment and restatement is generally effective, July 1, 1992.
Certain identified provisions are effective on different dates as
noted herein.  Provisions made effective prior to July 1, 1992
amend the corresponding terms of both the Plan and the Merged
Plans as of the date indicated, and any reference in such
provisions to the Plan shall be taken as a reference to both the
Plan and the Merged Plans (unless the context clearly indicates
to the contrary).

          (j)  ELECTIVE DEFERRAL:  With respect to any taxable
year, a Participant's Elective Deferral is the sum of all
employer contributions made on his behalf pursuant to an election
to defer under any (i) qualified cash or deferred arrangement (as
defined in Code section 401(k), (ii) simplified employee pension
cash or deferred arrangement (as defined in Code section 408(k)),
(iii) eligible deferred compensation plan under Code section 457,
(iv) plan described in Code section 501(c)(18), and (v) any
employer contribution made on the behalf of a Participant for the
purchase of an annuity contract under Code section 403(b)
pursuant to a salary reduction agreement.

          (k)  ELIGIBLE PAY:  Effective January 1, 1993, for each
Plan Year, a Participant's Eligible Pay shall be determined as
follows:

          (1)  Participants Other Than Those Employed by the KFC 
Division:  With respect to all Participants other than those
employed by the KFC division, Eligible Pay shall be determined as
follows:

               (i)  In the case of a Participant who is a salaried
Employee considered exempt from the minimum wage and overtime
pay provisions of the Fair Labor Standards Act, Eligible Pay shall mean:

                    (A)  If the Participant was an Employee on
the Eligible Pay determination date (or dates), (hereinafter
referred to as the determination date), designated by the Plan
Administrator, with respect to Employees employed by the Frito
division,

 II-4

                         (I) the Participant's annual base salary
in effect on the Eligible Pay determination date in the preceding
Plan Year, plus

                         (II)  any lump sum amount received by
the Participant prior to the Salary Determination Date and during
such preceding Plan Year under the PepsiCo Executive Incentive or
PepsiCo's or subsidiary's Middle Management Incentive Plan,
including any trimester Frito-Lay Management Incentive Plan
payments received by the Participant.

               (B)  If the Participant was not an Employee on the
Eligible Pay determination date in the preceding Plan Year, the
Participant's annual base salary on his Employment Commencement
Date.

          (ii)  In the case of a Participant who is a salaried
Employee not considered exempt from the minimum wage and overtime pay
provisions of the Fair Labor Standards Act, and in the case of a Participant
who is an hourly Employee, Eligible Pay shall mean:

                (A)  If the Participant was an Employee on or before
the Eligible Pay determination date in the Preceding Plan Year,
the greater of:
                        (I)  the Participant's W-2 earnings, plus any
amounts designated as "Choice Pay" ("Flexible Pay" in the case of
Frito-Lay and its subsidiaries, collectively "Flexible Pay") and
contributed by salary reduction agreement to the Employer's
Benefits Plus program or this Plan, in each case through the
Eligible Pay determination date during such preceding Plan Year,
annualized in accordance with rules adopted by the Plan
Administrator, or

 II-5

                        (II)  the Participant's W-2 earnings plus
Flexible Pay during the calendar year immediately prior to such
preceding Plan Year.

                (B)  If the Participant was not an Employee on or
before the Eligible Pay determination date, the Participant's annual 
base salary or hourly wage rate on his Employment Commencement Date, 
annualized in accordance with rules adopted by the Plan Administrator.

          (iii)  In the case of a Participant who is classified as
a commissioned ("route sales") Employee, Eligible Pay shall mean:

                (A)  If the Participant was an Employee on or before the 
Eligible Pay determination date, the greater of:

                        (I)  the Participant's W-2 earnings, plus any
amounts of Flexible Pay through the Eligible Pay determination date during 
the preceding Plan Year, annualized in accordance eith rules adopted by 
the Plan Administrator, or

                        (II)  the Participant's W-2 earnings plus Flexible
Pay during the Calendar year immediately prior to such preceding Plan Year.

                (B)  If the Participant was not an Employee on or before
the Eligible Pay determination date for the preceding Plan Year, the 
Participant's weekly guarantee on his Employment Commencement Date,
annualized in accordance with rules adopted by the Plan Administrator.

          (iv) In the case of a Participant who is an hourly
Employee of the Pizza Hut division, Eligible Pay shall mean:

 II-6

                (A)  If the Participant was an Employee on the Eligible
Pay determination date designated by the Plan Administrator with
respect to Pizza Hut division Employees, the sum of:

                         (I)  the Participant's annualized hourly wage
rate in effect on the Eligible Pay determination date, plus

                         (II) any overtime paid prior to the
Eligible Pay determination date but within the same calendar
year, annualized in accordance with rules adopted by the Plan
Administrator.

                (B)  If the Participant was not an Employee
on the Eligible Pay determination date with respect to Pizza Hut
division Employees, the sum of the amounts under (I) and (II)
above but determined as of the Participant's Employment
Commencement Date.

          (2)  Participants Employed by the KFC Division:  With
respect to a Participant employed by the KFC division of the
Company, his Eligible Pay shall be determined as follows:

               (i) The Participant's salary or wages, including
forms of pay delivered in alternative manners such as piecework
and payment by mileage for drivers, overtime, shift
differentials, commissions, bonuses received under the PepsiCo
Executive Incentive Plan or the Company's or a subsidiary's
Middle Management Incentive Plan, and

               (ii)  Any amount not included in (i) above which
is contributed by the Employer on behalf of the Participant
pursuant to a salary reduction agreement and which is not
includable in gross income under Code sections 125, 402(e)(4), or
402(g).

 II-7

The amounts under subparagraphs (i) and (ii) shall be
taken from payroll records for the full calendar year that
precedes the Plan Year by 2 years.  For example, for the 1993
Plan Year, "Eligible Pay" shall be determined from amounts earned
for the full calendar year ending December 31, 1990.  For a
Participant who has only a partial year's  earnings during the
full calendar year 2 years prior to the Plan Year, the partial
year's earnings shall be annualized.  For a Participant with no
earnings during the full calendar year 2 years prior to the Plan
Year, Eligible Pay shall equal the Participant's base salary or
wages, not including alternative forms of base pay, overtime,
shift differentials, commissions or bonuses on the later of:  (A)
the "Eligible Pay determination date" designated by the Plan
Administrator with respect to Employees other than those employed
by a restaurant division or a Frito division, or (B) the
Participant's Employment Commencement Date.

               (iii)  In the case of a Participant who is an
hourly Employee of the KFC division, Eligible Pay shall mean:

                    (A)  If the Participant was an Employee on
the Eligible Pay determination date designated by the Plan
Administrator with respect to KFC division Employees, the sum of:

                         (II)  any overtime paid prior to the
Eligible Pay determination date but within the same calendar
year, annualized in accordance with rules adopted by the Plan
Administrator.

                    (B)  If the Participant was not an Employee
on the Eligible Pay determination date with respect to KFC
division Employees, the sum of the amounts under (I) and (II)
above but 

 II-8

determined as of the Participant's Employment
Commencement Date.

          (3)  Special Rules for Determining Eligible Pay:

               (i)  For purposes of paragraphs (1) through (3)
above and except for salary reduction amounts designated as
Flexible Pay under an Employer's Benefits Plus program that are
used to buy benefits and amounts contributed under the Plan,
salary or wages shall not include amounts or the value of
benefits received, or deemed received, under any performance
share plan, stock option plan or similar plan or under any
pension or welfare benefit plan maintained by the Employer,
whether such plan is qualified or non-qualified and whether such
amounts are deferred or not deferred.

               (ii) In the case of Employees who transfer from
one Employer to another during the year, Eligible Pay of such
Employees shall be the amount of annualized base salary or hourly
wage rate on the transfer date plus annualized overtime,
commission pay received prior to the transfer date and prior to
the determination date and the amount of any lump sum bonus paid
from an Employer's Incentive Compensation program.

               (iii)     Notwithstanding the foregoing provisions
of this subsection, in the case of an Employee who elects to make
nonqualified deferrals under the PepsiCo Executive Income
Deferral Program for an upcoming Plan Year, the Employee's
Eligible Pay for such Plan Year shall not be greater than his
current base pay and the prior year's bonus under the Employer's
Incentive Compensation Program, decreased by any nonqualified
deferrals elected for the upcoming Plan Year, and increased by
amounts that will be received as distributions from the PepsiCo
Executive Income Deferral Program for such Plan Year.

 II-9

               (iv) For any Plan Year beginning on or after
January 1, 1989, the Eligible Pay of each Participant taken into
account under the Plan shall not be less than $10,000 and shall
not exceed $200,000, the latter as adjusted by the Secretary of
the Treasury.  In determining the Eligible Pay of a Participant
for purposes of the $200,000 limitation set forth in the
preceding sentence, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the Plan Year.  If, as a result of the
application of such rules, the adjusted $200,000 limitation is
exceeded, then the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Eligible Pay as determined under this Section prior to the
application of this limitation.

               (v)  For any Plan Year beginning on or after
January 1, 1994, the Eligible Pay of each Participant taken into
account under the Plan shall not be less than $10,000 and shall
not exceed $150,000, the latter as adjusted by the Secretary of
the Treasury.  In determining the Eligible Pay of a Participant
for purposes of the $150,000 limitation set forth in the
preceding sentence, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19
before the close of the Plan Year.  If, as a result of the
application of such rules, the adjusted $150,000 limitation is
exceeded, then the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Eligible Pay as determined under this Section prior to the
application of this limitation.

 II-10

References in the Plan to deferrals of Eligible Pay, or Salary
Deferral Contributions from Eligible Pay, shall be read as
referring to deferrals of a Participant's current Employee
compensation not in excess of Eligible Pay, determined as above.

          (l)  EMPLOYEE:  Any person who is: receiving
remuneration for personal services currently rendered in the
employment of an Employer (or who would be receiving such
remuneration except for an Authorized Leave of Absence), and who
is described in one of the following paragraphs:

               (1) A United States citizen whose primary place of
employment is within the United States and its possessions
(collectively referred to in this subsection as "the U.S.");

               (2) An alien who has been lawfully admitted for
permanent residence in the U.S. (referred to in this subsections
a "resident alien") and whose primary place of employment is
within the U.S., but excluding any person working as a designate
or in a U.S. assignment that the Employer classifies as primarily
for training or temporary;

               (3)  A United States citizen or resident alien
relocated by the Employer as an Unites States expatriate;

               (4)   Effective January 1, 1994, a resident alien
who is classified by the Employer as a globalist; and

               (5)    Effective September 1, 1994, a third-
country national (as defined below) who is a resident alien or
whose primary place of employment is within the U.S.
For purposes of this subsection, a "third-country national" shall
mean an alien who works for an Employer outside of his home
country, and who previously worked for an Employer in another
country that was not his home country.

          (m)  EMPLOYER:  The Company, any foreign subsidiary
which has Employees described in subsection (l)(2) above, and any
other subsidiary which is authorized by the Company to
participate herein and which adopts the Plan for its 

 II-11


Employees, in accordance with any conditions required by the Company. 
Any such other subsidiary shall be designated on the attached
Schedules 1, 2, 3, 4, and 5.

          (n)  EMPLOYMENT:  Service with an Employer.

          (o)  EMPLOYMENT COMMENCEMENT DATE:  The date on which
an Employee first performs an Hour of Service for a member of the
PepsiCo Organization.

          (p)  ERISA:  Public Law 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time.

          (q)  EXCESS CONTRIBUTIONS:  With respect to any Plan
Year, the excess of:

          (1)  The aggregate amount of Employer contributions
paid to the Plan as Salary Deferral Contributions on behalf of
Highly Compensated Employees for such Plan Year, over

          (2)  The maximum amount of such contributions permitted
by the limitations contained in Section 4.3(a) (determined by
reducing such contributions made on behalf of such Highly
Compensated Employees in order of their Average Deferral
Percentages, beginning with the Highly Compensated Employee(s)
with the highest Average Deferral Percentage).

          (r)  EXCESS ELECTIVE DEFERRALS:    Those Elective
Deferrals that are includable in an individual's gross income
under Code section 402(g) because they exceed the dollar
limitation in effect for the year under such Code section.
Excess Elective Deferrals shall be treated as annual additions
under the Plan for purposes of Section 4.5.

          (s)  FIDUCIARIES:  The named fiduciaries, as defined in
section 402 of ERISA, who shall be the Plan Administrator and the
Trustee, and other parties designated as fiduciaries, as defined
in section 3(21) of ERISA, by such named fiduciaries in
accordance with the terms of the Plan and the Trust (but only
with respect to the specific responsibilities of each in
connection with the Plan and Trust).

 II-12

          (t)  HIGHLY COMPENSATED EMPLOYEE:

          (1)  General Definition:  Effective for Plan years
beginning on or after January 1, 1987, any Employee who during
the relevant Plan Year or the preceding Plan Year:

          (i)  Was, at any time, a 5 percent owner (as defined in
Code section 416(i)(1));

          (ii) Received compensation from an Employer in excess
of $75,000 (as adjusted pursuant to Code section 415(d));

          (iii)     Received compensation from an Employer in
excess of $50,000 (as adjusted pursuant to Code section 415(d))
and was a member of the group consisting of the top 20 percent of
the employees when ranked on the basis of compensation paid
during the relevant year (i.e., the top-paid group), or

          (iv) Was an officer of an Employer and received
compensation greater than 50 percent of the dollar limitation in
effect under Code section 415(b)(1)(A) for such Plan Year.

          (2)  Certain Current Year Exclusions:  In applying
paragraph (1) with respect to the current Plan Year, any Employee
not described in subparagraphs (ii), (iii) or (iv) above for the
preceding Plan Year (without regard to this sentence) shall not
be treated as described in subparagraphs (ii), (iii) or (iv) for
the current Plan Year unless such Employee is among the 100
Employees receiving the greatest compensation from the Employer
for the current Plan Year.

          (3)  Determination of Officers:  For purposes of
applying subparagraph (iv) of paragraph (1) above, no more than
50 Employees, or, if less, the greater of 3 Employees or 10
percent of all Employees, shall be treated as officers.  In
addition, if, for any year, no officer of the Employer is de
scribed in subparagraph (a)(iv) above, the officer of the
Employer with the greatest 

 II-13

compensation shall be treated as an officer described in subparagraph 
(a)(iv) above.

          (4)  Former Employees:  A former Employee shall be
treated as a Highly Compensated Employee if:

          (i)  Such Employee was a Highly Compensated Employee
when such Employee separated from service, or

          (ii)  Such Employee was a Highly Compensated Employee
at any time after attaining age 55.

          (5)  Treatment of Certain Family Members: Any family
member of a 5 percent owner or one of the 10 Highly Compensated
Employees receiving the greatest compensation from the Employer
during the relevant year shall be aggregated with such 5 percent
owner or top-ten Highly Compensated Employee for purposes of
Section 4.3 of the Plan.  In such case, the family member and 5
percent owner or top 10 Highly Compensated Employee shall be
treated as a single Employee having compensation and Plan
contributions equal to the sum of such compensation and
contributions of the family member and 5 percent owner or top 10
Highly Compensated Employee.  For purposes of this subsection,
family member includes the spouse, lineal ascendants and
descendants of the Employee and the spouses of such lineal
ascendants and descendants.

          (6)  Compensation:  For purposes of this subsection,
compensation means an Employee's compensation as determined under
Code section 415(c)(3), increased by elective contributions that
are: (i) made on behalf of the Employee under this Plan, a Merged
Plan, another section 401(k) plan or a cafeteria plan of his
Employer, and (ii) that are excludable from income under Code
sections 125 or 402(a)(8).

The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 

 II-14

employees, the number of employees treated as officers
and the compensation that is considered, will be made in 
accordance with Code section 414(q) and the regulations thereunder.

          (u)  HOUR OF SERVICE:  Each hour for which an Employee
is:
               (1)  Paid, or entitled to payment, by the Employer
for the performance of duties.

               (2)  Directly or indirectly compensated or
entitled to compensation by the Employer for reasons other than
the performance of duties (such as vacation, holidays, sickness,
jury duty, disability, lay-off, military duty or leave of
absence) irrespective of whether the employment relationship has
terminated unless such compensation is solely for the purposes of
complying with applicable workers' compensation or disability
insurance laws; or

               (3)  Awarded back-pay or back-pay is agreed to by
the Employer without regard to mitigation of damages, except that
no Hour of Service shall be credited under this paragraph for any
period for which the Employee is credited with an Hour of Service
under paragraph (1) or (2) above.

In addition, each hour for which a leased employee, within the
meaning of Code section 414(n), is paid or entitled to payment by
the Employer for the performance of duties shall be considered an
Hour of Service.

          (v)  INVESTMENT EXPENSES:  All expenses related to the
management and maintenance, on a separate basis, of the
individual investment options under the Plan.  The term
"Investment Expenses" shall not include general fees for
management and maintenance of the Trust as a whole.

          (w)  LIMITATION YEAR:  The 12-month period commencing
on January 1 and ending on December 31.

          (x)  MERGED PLANS:  The Kentucky Fried Chicken
Corporation Long Term Savings Program, the Pizza Hut Long Term
Savings Program, the Taco Bell Long Term Savings Program and the
Pepsi-Cola Operating Company Long Term 

 II-15

Savings Program, as in effect prior to their merger into this 
Plan on December 31, 1991.

          (y)  NON-HIGHLY COMPENSATED EMPLOYEE:  Effective for
Plan Years beginning on or after January 1, 1987, any Employee
who is not a Highly Compensated Employee.

          (z)  PARTICIPANT:  Any individual who is either an
Active Participant or an Inactive Participant.

               (1)  Active Participant:  Any eligible Employee,
as defined in Section 3.1, who has a current election in effect
to make Salary Deferral Contributions in accordance with Article
IV.
               (2)  Inactive Participant:  Any individual (other
than an Active Participant) who has an Account under the Plan.

          (aa) PEPSICO ORGANIZATION:  The controlled group of
corporations of which the Company is a member, as defined in Code
Section 414(b) and regulations issued thereunder.

          (bb) PLAN:  The PepsiCo Long Term Savings Program, the
Plan set forth herein, as it may be amended from time to time.
The Plan Administrator may also designate certain informal names
for the Plan, such as "Save-Up", for use in communications
regarding the Plan.

          (cc) PLAN ADMINISTRATOR:  The Company, or its successor
or successors, which shall have authority to administer the Plan
as provided in Article VIII.

          (dd) PLAN YEAR:  The 12-month period commencing on
January 1 and ending on December 31.  From December 1, 1988 to
December 31, 1991, the Plan Year commenced on December 1.

          (ee) RECORDKEEPER:  The party designated by the Plan
Administrator to maintain records of Participants' Accounts in
accordance with procedures established by the Plan Administrator.

 II-16

          (ff) RETIRED EMPLOYEE:  Any person: (i) who has
received, while age 55 or over, a qualifying lump sum
distribution from a defined benefit pension plan sponsored by an
Employer, and (ii) who was an Employee eligible to participate in
this Plan immediately prior to his retirement from the Employer.
For purposes of this subsection, a qualifying lump sum
distribution shall refer to lump sums other than single sum
distributions with a value of $3,500 or less, determined in
accordance with Code section 417(e).

          (gg) ROLLOVER ACCOUNT:  The account maintained to
record any rollover contributions pursuant to Section 4.4, and
any adjustments relating thereto.  A Participant's Rollover
Account shall at all times be fully vested.

          (hh) ROLLOVER CONTRIBUTIONS: Contributions to the Plan
that are made pursuant to Section 4.4.

          (ii) SALARY DEFERRAL ACCOUNT:  The account maintained
for a Participant to record amounts deferred pursuant to the
election described in Section 4.1, as well as any adjustments
relating to such amount.  A Participant's Salary Deferral Account
shall at all times be fully vested.

          (jj) SALARY DEFERRAL CONTRIBUTIONS:  Any Employer
contributions made to the Plan at the election of a Participant,
in lieu of cash compensation, pursuant to Section 4.1.

          (kk) SEVERANCE FROM SERVICE DATE:  An Employee's
Severance from Service Date shall occur on the earlier of:

               (1)  The date the Employee quits, retires, is
discharged or dies; or

               (2)  The first anniversary of the date the
Employee is absent from service with an Employer (with or without
pay) for any reason other than a quit, retirement, discharge or
death, such as vacation, holiday, sickness, disability, leave of
absence or layoff.

 II-17

          (ll) TERMINATION OF EMPLOYMENT:  The cessation of an
Employee's employment with an Employer or other member of the
PepsiCo Organization, whether by quit, resignation, discharge,
retirement, disability or indefinite layoff.  However, such term
shall not include an Authorized Leave of Absence or the transfer
from the Employment of one Employer that maintains this Plan to
another such Employer, or to employment with any other member of
the PepsiCo Organization.

          (mm) TRUST (OR TRUST FUND):  The fund established
pursuant to the Trust instrument to receive and to invest amounts
credited to Participants' Accounts and from which distributions
will be made.

          (nn) TRUSTEE:  The individual or corporation appointed
by the Company pursuant to the Trust instrument to hold the Trust
Fund.

          (oo) VALUATION DATE:  Each business day, except that
the Trustee may temporarily suspend valuations when it deems it
to be necessary in accordance with Section 5.2(b).  In all cases,
however, there shall be a Valuation Date on the last business day
of the Plan Year.

          (pp) YEAR OF SERVICE:  A 12-month period of service
generally commencing on an Employee's Employment Commencement
Date and ending on the first anniversary thereof.  However, if an
Employee has a Severance from Service Date prior to this first
anniversary and then later returns to service, the following
periods shall be counted in determining whether the Employee has
completed 12 months of service:

                    (1)  If an Employee terminates employment
because of a quit, discharge or retirement and then returns to
the employment of the PepsiCo Organization within 12 months from
his Severance from Service Date, the Employee's period of
severance shall be taken into account.

                    (2)  If an Employee terminates employment
because of a quit, discharge or retirement (during any other
absence from service of 12 months or less) and then returns to
the employment of the PepsiCo Organization within 12 months 

 II-18

from the date on which he was first absent, the Employee's 
period of severance shall be taken into account.

                    (3)  If an Employee who terminates employment
because of a quit, discharge or retirement returns to the
employment of the PepsiCo Organization following a 12-month
period of severance, the Employee's prior period of employment
shall be taken into account provided his period of severance is
less than the greater of (i) 5 years or (ii) his prior period of
employment.

          2.2  Construction:  The terms of this Plan shall be
construed in accordance with this section.

               (a)  Gender and Number:  The masculine gender,
where appearing in the Plan, shall be deemed to include the
feminine gender and the singular shall include the plural, unless
the context clearly indicates to the contrary.

               (b)  Headings:  The headings of sections and
subsections are for ease of reference only and shall not be
construed to limit or modify the detailed provisions thereof.

 III-1

                            ARTICLE III

                    Eligibility and Participation

          3.1  Eligibility:  The following Employees shall be
eligible to participate in the Plan:  all full-time salaried
Employees of the Company, all full-time salaried, hourly,
commissioned sales or transportation Employees of the Employers
designated on the attached Schedules 1, 2, 3 and 4; all full-time
hourly Employees of the Company designated on the attached
Schedule 5, all salaried part-time Employees who are currently
eligible to enroll in his Employee's Benefits Plus Program of the
Employer, all full-time hourly Employees designated in Article B,
all hourly Employees designated in Article C, and any Employee
described in Section 2.1(1)(2); provided, however, that to be
eligible such Employee must be currently eligible to enroll in
his Employer's Benefits Plus program.  Except as provided in this
section 3.1, the following Employees or classes of Employees or
classes of Employees shall not be eligible to participate in this
Plan:
               (a)  Any Employee whose terms and conditions of
employment are determined by collective bargaining with a union
representing such persons and with respect to whom inclusion in
this Plan has not been specifically provided for in such
collective bargaining agreement;

               (b)  Any Employee who is classified by an Employer
in accordance with its usual practices as associate, casual,
temporary or part-time (determined considering only the
Employee's service with each individual Employer);

               (c)  Any Employee who is a leased employee within
the meaning of Code section 414(n); and

               (d)  Effective December 1, 1989, any Highly
Compensated Employee who has not attained age 21 and completed a
Year of Service.

          3.2  Participation:

               (a)  Commencement of Active Participation:  An
Employee who is eligible for the Plan under Section 3.1 or the
Appendix (an eligible Employee) shall become an Active
Participant upon enrolling in the Plan.  The Participant's enrollment in

 III-2

the Plan shall be made by  electing to defer a portion of his Eligible 
Pay, in accordance  with Section 4.1(b). An eligible Employee's election 
to participate actively in the Plan shall be effective as soon as 
practicable for his Employer.

               (b)  Termination of Participation:  An Active
Participant shall continue to participate actively in the Plan
until he revokes his enrollment or his enrollment ends as a
result of his Termination of Employment or transfer to a position
that is ineligible for participation.  When active participation
ceases, an individual with a balance in his Plan Account shall
continue as an Inactive Participant until his Account has been
distributed.

               (c)  Recommencement of Active Participation:  Any
individual whose active participation has terminated pursuant to
subsection (b) may return to active participation by reinstating
his enrollment (following his return to service as an eligible
Employee, if applicable).

 IV-1
                             ARTICLE IV

                Contributions and Deferral Amounts

          4.1  Elective Deferrals:  An Employee who is eligible
under Section 3.1 and who has Eligible Pay may elect to defer a
portion of his Eligible Pay in accordance with the following
subsections.

               (a)  Deferral Amount:  Subject to the limitations
established by this Article, each Active Participant may defer in
any Plan Year up to 10 percent of his Eligible Pay in accordance
with this section.  In the event a Participant elects to defer a
portion of his Eligible Pay under the Plan, it will be designated
for contribution by the Employer to the Trust on behalf of the
Participant, and for deposit in his Salary Deferral Account.  All
amounts deposited to a Participant's Salary Deferral Account
shall at all times be fully vested.

               (b)  Election to Defer:  Each Employee who
qualifies as an eligible Employee under Section 3.1 may elect to
defer a portion of his Eligible Pay in accordance with subsection
(d).  An eligible Employee shall make this election by:

               (1)  Completing and returning the enrollment form,
or utilizing the telephone enrollment system, provided by the
Plan Administrator,

               (2)  Designating a portion of his Eligible Pay to
be contributed by his Employer to the Plan, and

               (3)  Indicating how such amounts are to be
invested under Section 5.2.

     An eligible Employee's election under this subsection shall
be effective as soon as practicable for his Employer and shall
remain in effect until it is modified or terminated under
subsection (c) below, or until his active participation
terminates in accordance with Section 3.2(b).

               (c)  Changes in Deferral Election:  Subject to
subsection (d), an Active Participant may elect to increase,
decrease or terminate the amount of his deferral at any time by
completing and returning a change of election form, or using the
telephone 

 IV-2

enrollment system to designate the revised deferral rate
to be contributed to the Plan.  A Participant's election
under this subsection shall be effective as soon as practicable
for his Employer.

               (d)  Election Procedures:  To be effective, an
election made pursuant to subsection (b) or (c) above must be
made in the manner specified by the Plan Administrator.  In
addition, any election shall specify the amount of the deferral
desired for each Plan Year as a whole dollar amount, subject to
the limitation in subsection (a) above.  Any election purporting
to defer more than 10 percent of Eligible Pay shall be treated as
an election to defer 10 percent of Eligible Pay.  Notwithstanding
the preceding sentence, the Plan Administrator shall not give
effect to elections that do not meet the minimum standards for
completeness and accuracy the Plan Administrator establishes from
time to time.

          (e)  Payroll Deductions:  A Participant's Salary
Deferral Contributions shall be withheld from his Eligible Pay
through automatic payroll deductions.  The amount to be withheld
in any pay period shall be a ratable share of the Participant's
currently effective salary deferral election for the entire Plan
Year.  Salary Deferral Contributions may not be withheld after
they have been actually or constructively received by the
Participant.

          4.2  Dollar Limits on Elective Deferrals:
Notwithstanding Section 4.1, a Participant's Elective Deferrals
shall be limited as provided in this section.

               (a)  Initial Limit:  Effective for calendar years
beginning on and after January 1, 1987, a Participant's Elective
Deferrals under the Plan shall be limited to $7,000 or, if
greater, the adjusted amount in effect under Code section 402(g)
for the preceding calendar year.

               (b)  Additional Limit:  Effective for Plan Years
beginning after 1987, a Participant's Elective Deferrals, which
are made in any calendar year to the Plan or any other
arrangement maintained by the Employer, shall be limited to the
amount permissible under Code section 402(g) for taxable years
beginning in such calendar year.

 IV-3

               (c)  Distribution of Excess Elective Deferral:

                    (1)  Assignment:  If the Elective Deferral
made on behalf of a Participant under all plans in which such
individual is a participant, whether or not maintained by the
Employer, exceeds the dollar limitation contained in Code section
402(g), such Participant may assign to this Plan any Excess
Elective Deferral made during a taxable year of the Participant
no later than March 1 following the close of, and with respect
to, the taxable year in which such Excess Elective Deferral was
made by:

                         (i)  Notifying the Plan Administrator in
writing of the Elective Deferral made under any plan other than
this Plan,
                         
                         (ii) Allocating in writing such Excess
Elective Deferral between or among such other plans and this
Plan, and
                         
                        (iii)     Stating in writing that if
such Excess Elective Deferral allocable to the Plan is not
distributed, the deferral limitations of Code section 402(g) will
be exceeded for the Participant's taxable year with respect to
which such Elective Deferral occurred.

                    (2)  Distribution:  Upon notification in
accordance with paragraph (1), the Plan Administrator shall
distribute any Excess Elective Deferral allocated to the Plan
(plus any income and minus any loss allocable thereto) to the
relevant Participant no later than April 15 of the calendar year
following the close of the taxable year of the Participant with
respect to which such Excess Elective Deferral was made.

               (3)  Determination of Income or Loss: Excess
Elective Deferrals shall be adjusted for any income or loss
through the end of the taxable year of the Participant with
respect to which such Excess Elective Deferral was made.  The
income or loss allocable to a Participant's Excess Elective
Deferral is the income or loss allocable to the Participant's
Salary Deferral Account for such taxable year, multiplied by a
fraction, the numerator of which is the Participant's 

 IV-4

Excess Elective Deferrals for such taxable year and the denominator of
which is the Participant's account balance attributable to Salary
Deferral Contributions as of the end of the taxable year without
regard to any income or loss occurring during such taxable year.
To the extent necessary to ensure compliance with subsection (b)
above, the Plan Administrator shall distribute Excess Elective
Deferrals to a Participant, notwithstanding the fact that the
Participant has not assigned such Excess Elective Deferrals to
this Plan by the deadline specified in subsection (c)(1).  Such
distribution shall be accomplished as contemplated in subsection
(c)(2) above.                                                 

          4.3  Limitation on Deferral Percentage:

          (a)  Limitation:  Notwithstanding anything herein to
the contrary, in any Plan Year beginning on or after January 1,
1987, the Average Deferral Percentage of the eligible Employees
who are Highly Compensated Employees for such Plan Year shall not
exceed the greater of (1) or (2) below:

          (1)  The Average Deferral Percentage of the eligible
Employees who are Non-Highly Compensated Employees for such Plan
Year multiplied by 1.25, or

          (2)  The Average Deferral Percentage of the eligible
Employees who are Non-Highly Compensated Employees for such Plan
Year multiplied by 2.0, provided, however, that in this case the
Average Deferral Percentage of the eligible Employees who are
Highly Compensated Employees shall not exceed the Average
Deferral Percentage of the eligible Employees who are Non-Highly
Compensated Employees by more than 2 percentage points.

          (b)  Average Deferral Percentage:  For purposes of
subsection (a) above, the Average Deferral Percentage for a
specified group of Employees for a Plan Year shall mean the
average of the ratios (calculated separately for each Participant
in such group) of:

 IV-5

          (1)  The amount of the Salary Deferrals made on behalf
of the Employee for the Plan Year (including Excess Elective
Deferrals of Highly Compensated Employees), to

          (2)  The Employee's compensation for the Plan Year
(whether or not the Employee was a Participant for the entire
Plan Year).

For Plan Years beginning on or after January 1, 1989, the Average
Deferral Percentage shall be computed to the nearest one
hundredth of one percent.

          (c)  Special Rules: In applying the limits set forth in
subsection (a) above, the following rules shall apply:

          (1)  For purposes of this subsection, compensation
means compensation as defined in Code section 414(s) and, for
Plan Years beginning on or after January 1, 1989, limited to
$200,000 (adjusted at the same time and in such manner as
permitted under Code section 415(d)) provided that for Plan Years
beginning on or after January 1, 1994, compensation is limited to
$150,000 (adjusted at the same time and in such manner as
permitted under Code section 415(d)).

          (2)  If a Highly Compensated Employee is eligible to
participate under more than one cash or deferred arrangement
described in Code section 401(k) maintained by the Employer, all
such cash or deferred arrangements shall be treated as one for
purposes of calculating such Employee's Average Deferral
Percentage.

          (3)  For purposes of determining the Deferral
Percentage of a Highly Compensated Employee who is a 5 percent
owner or one of the 10 most highly-paid Highly Compensated
Employees, as described in Section 2.1(t)(5), the Salary Deferral
Contributions and compensation of such Employee shall include the
Salary Deferral Contributions and compensation for the Plan Year
of such Highly Compensated Employee's Family Members, as
described in Code section 414(q)(6).  Family Members, with
respect to such Highly 

 IV-6

Compensated Employees, shall be disregarded as separate Employees
in determining the Average Deferral Percentage both for eligible 
Employees who are Non-Highly Compensated Employees and for eligible 
Employees who are Highly Compensated Employees.

          (d)  Adjustment of Salary Deferrals:  If during a Plan
Year the Plan Administrator determines that there is a likelihood
that the Average Deferral Percentage of the Highly Compensated
Employees will exceed the limitation specified in subsection (a),
then the Plan Administrator may prospectively reduce or limit the
deferrals of the Highly Compensated Employees to such amount and
beginning as of such pay period during the Plan Year as is deemed
necessary by the Plan Administrator in its sole discretion to
prevent the limitation in subsection (a) from being exceeded for
the Plan Year.  The Plan Administrator may terminate (in whole or
in part) any reduction or limitation on deferrals under this
subsection which is no longer necessary to prevent the limitation
specified in subsection (a) from being exceeded for the Plan
Year.  Whenever necessary during the Plan Year, the Plan
Administrator may institute further reductions or limitations on
deferrals, or reinstate reductions or limitations on deferrals,
to the extent required to prevent the limitation in subsection
(a) from being exceeded.

          (e)  Distribution of Excess Contributions and Income:
If the Average Deferral Percentage of the eligible Employees who
are Highly Compensated Employees exceeds the limitations of
subsection (a) for any Plan Year, then notwithstanding any other
provision of the Plan, any Excess Contributions for such Plan
Year (plus any income and minus any loss allocable thereto) shall
be distributed to the appropriate Highly Compensated Employees
and, where applicable, family members, not later than two and one-
half months following the Plan Year with respect to which such
Excess Contributions were made.

          (1)  Determination of Income or Loss: Excess
Contributions shall be adjusted for any income or loss through
the end of the Plan Year for which 

 IV-7

the Excess Contributions occurred.  The income or loss allocable to a 
Participant's Excess Elective Deferral shall be as follows:

          (i)  For the Plan Year beginning in 1987, the Employer
may use any reasonable and consistently applied method for
computing the income allocable to any Excess Contributions for
such Plan Year.

          (ii) For Plan Years beginning on or after January 1,
1988, the income or loss allocable to Excess Contributions is the
income or loss allocable to the Participant's Salary Deferral
Account for the Plan Year for which the Excess Contributions
occurred multiplied by a fraction, the numerator of which is the
Participant's Excess Contributions for such Plan Year and the
denominator of which is the Participant's account balance
attributable to Salary Deferral Contributions as of the end of
the Plan Year without regard to any income or loss occurring
during such Plan Year.

          (2)  Special Rules:

          (i)  In the event family members are aggregated for pur
poses of this section, distributions to such family members of
any Excess Contributions shall be made in the manner prescribed
by the regulations under Code section 401(k).

          (ii)  Any distribution of Excess Contributions and
income thereon shall be made to Highly Compensated Employees on
the basis of the respective portions of the total Excess
Contributions attributable to each such Employee.

          (iii)  Any distribution of Excess Contributions and
income thereon may and shall be made without regard to any other
provision of this Plan restricting distributions.

          (f)  Determination By Plan Administrator:
Notwithstanding the foregoing provisions of this section, any
determination required by this section shall be made by 

 IV-8

the Plan Administrator, and the determination by such Plan Administrator
of the method of compliance with subsection (a) and reduction of
deferrals in excess of that permitted by subsection (a), in
accordance with subsection (d), and the determination of any
Excess Contribution to be distributed pursuant to subsection (e),
shall be final, binding, and conclusive as to all Participants,
former Participants, Beneficiaries, and any other person or
entity associated with or benefiting from this Plan.

          (g)  Priority of Application of Sections: Section 4.2
shall be applied before this section.

          4.4  Rollover Contributions:  At the request of a
Participant, a Retired Employee or an Employee who is eligible
under section 3.1 (or could be upon the completion of any
requirements with respect to age or service), the Plan may accept
a rollover of cash amounts from another qualified plan described
in section 401(a) of the Code, including an individual retirement
account or annuity whose assets came solely from a qualified
plan.  Any such rollover amount will be held for the Participant,
Employee, or Retired Employee, as the case may be, in a Rollover
Account established for his benefit.  A person who makes such a
rollover contribution to the Plan, but who is not otherwise
eligible to make (or who chooses not to make) a deferral election
under Section 4.1(b), shall be considered an Inactive
Participant.  The Plan Administrator and the Trustee may request
such information from the Participant, Employee, or Retired
Employee, as the case may be, any documents or opinion of counsel
which it, in its discretion, deems necessary to determine that a
proper rollover contribution will be made.  Amounts in a Rollover
Account shall be invested as designated by the Participant
pursuant to Section 5.2(c).  The amounts in the Rollover Account
shall be distributed at the same time and in the same manner as
amounts in the Salary Deferral Account.

          4.5  Maximum Allocations:

          (a)  The amount of Annual Additions (as defined in
subsection (d) below) which may be credited to the Participant
under this Plan during any Limitation Year shall not exceed the
lesser of $30,000 (or, if greater, one fourth of the defined
benefits dollar limitation set forth in Code section 415(b)(1) as
in effect for the Limi-

 IV-9

tation Year) or 25% of the Participant's Annual Compensation
(as defined in subsection (e) below) for the applicable Limitation Year.

          (b)  For any Participant in the Plan who is also a
participant in one or more defined benefit plans (as defined in
section 414(j) of the Code) maintained by the Company or by the
Employer, the sum of the fractions in (1) and (2) below, computed
as of the close of the Limitation Year, may not exceed 1.0, where
the fractions are determined as follows:

          (1)  The Projected Annual Benefit (as defined in
subsection (d) below) of the Participant under such defined
benefit plans, divided by the lesser of:

          (i)  the product of the dollar limitation determined
for the Limitation Year under Code sections 415(b) and (d)
multiplied by 1.25 (or 1.0, if the Plan is a Top-Heavy Plan, as
defined by Section 14.2(c)), or

          (ii) 140 percent of the Participant's Average
Compensation (as defined in subsection (d) below), including any
adjustments under Code section 415(b) plus

          (2)  The sum of the Annual Addition to such
Participant's accounts under this Plan and all other defined
contribution plans maintained by the Employer for such Limitation
Year and for all Prior Years (as defined in subsection (d) below)
divided by the sum of the lesser of the following amounts
determined for such Plan Year and all Prior Years:

          (i)  the product of the Dollar Limitation (as defined
in subsection (d) below) in effect for the year multiplied by
1.25 (or 1.0, if the Plan is a Top-Heavy Plan, as defined by
Section 14.2(c)), or

          (ii) 35 percent of the Participant's Annual
Compensation for the year.

 IV-10

          (c)  In the event that a Participant's Annual Addition
under this Plan, when added to the Annual Addition under any
other defined contribution plan (as defined in section 414(i) of
the Code) or the Projected Annual Benefit under any defined
benefit plan maintained by the Employer, exceeds the limitations
specified in Section 4.5(a) or (b), appropriate reductions in
such Annual Addition or Projected Annual Benefit shall be made in
the following order:

          (1)  First, under any defined benefit plan(s)
maintained by the Employer,

          (2)  To the extent that additional reductions are still
necessary, under this Plan, and

          (3)  To the extent that any additional reductions are
still necessary, under a PepsiCo employee stock ownership plan.

          (d)  For purposes of this Section 4.5, the following
definitions and rules of interpretation shall apply:

          (1)  Effective for years beginning after December 31,
1986, the "Annual Addition" of a Participant means the sum
credited to a Participant's account for any year of (i) employer
contributions; (ii) employee contributions; (iii) forfeitures and
(iv) amounts described in Code sections 415(l)(2) and 419A(d)(2).
Notwithstanding the foregoing, for years beginning prior to
January 1, 1987, only that portion of the employee's
contributions equal to the lesser of: (A) the portion of his
employee contributions (if any) during such year in excess of 6
percent of his annual compensation, or (B) one-half of his
employee contributions during such plan year shall be considered
an "Annual Addition."  The Annual Addition for any year beginning
prior to January 1, 1987, shall not be recomputed to treat all
employee contributions as an Annual Addition.

          (2)  "Projected Annual Benefit" means the Annual
Benefit (as defined in paragraph (3) below) to which a
Participant would be entitled under 

 IV-11

a defined benefit plan (after giving effect to any limitation on such 
benefit contained in such plan that may be applicable to the Participant) 
on the as sumptions that he continues employment until his Normal
Retirement Date thereunder, that his compensation continues at
the same rate as in effect for the Limitation Year under
consideration until such Normal Retirement Date, and that all
other relevant factors used to determine benefits under such plan
remain constant for all future Limitation Years.

          (3)  The "Annual Benefit" of a Participant means the
annual amount payable under a defined benefit plan computed in
accordance with the following rules:

          (i)  Where the Annual Benefit payable under a defined
benefit plan is other than in the form of either a single life
annuity or a qualified joint and survivor annuity within the
meaning of Code section 417(b) it shall be adjusted to an
actuarial equivalent benefit in the form of a single life
annuity.

          (ii)  In the case of a benefit under a defined benefit
plan which begins prior to the Participant's Social Security
Retirement Age (as defined below), such benefit shall be adjusted
so that it is the actuarial equivalent of a benefit commencing at
the Participant's Social Security Retirement Age for purposes of
applying the Code section 415(b) dollar maximum.

          (iii)  In the case of a benefit under a defined benefit
plan which begins after the Participant's Social Security
Retirement Age, such benefit shall be adjusted to the actuarial
equivalent of a benefit commencing at the Participant's Social
Security Retirement Age for purposes of applying the Code section
415(b) dollar maximum.

          (iv)  For years beginning prior to January 1, 1987, sub
paragraph (B) shall be applied by substituting "age 62" for "the
Participant's Social Security Retirement Age," and subparagraph
(C) shall be applied by substituting "age 65" for "the

 IV-12

Participant's Social Security Age."

          (4)  "Average Compensation" means a Participant's
average compensation for the period of 3 consecutive Plan Years
(or the actual number of consecutive years of employment for
Participants employed by an Employer less than 3 consecutive
years) during which the Participant had the greatest aggregate
Annual Compensation.

          (5)  "Prior Year" means a year, preceding the current
Limitation Year, in which the Participant was in the service of
the Employer.  For purposes of the preceding sentence, "year"
shall mean (in the event the Plan was in existence during such
year) a Limitation Year, or (in the event the Plan was not in
existence during such year) a 12- month period which begins and
ends on the same dates as the Limitation Year.

          (6)  "Dollar Limitation" means the limitation provided
in Code section 415(c)(1)(A) (adjusted in accordance with
Internal Revenue Service Regulations) as in effect for the
particular Plan Year.

          (7)  "Social Security Retirement Age" means age 65 in
the case of a Participant who attains age 62 before January 1,
2000; age 66 in the case of a Participant who attains age 62
after December 31, 1999 but before January 1, 2017; and age 67 in
the case of a Participant who attains age 62 after December 31,
2016.

          (8)  For purposes of Section 4.5(b)(1)(i) above, if as
of the last Plan Year ending before January 1, 1983, a
Participant's accrued benefit (within the meaning of Section
235(g)(4) of the Tax Equity and Fiscal Responsibility Act of
1982) under the Employer's defined benefit plans is greater than
$90,000 (and also such other amount as may apply pursuant to
automatic adjustments of the $90,000 figure), then Section
4.5(b)(1)(i) shall be 

 IV-13

applied by substituting such accrued benefit for $90,000 where it 
appears therein.

          (9)  For purposes of computing the maximum allocation
under either subsection (a) or (b), all defined benefit plans
(whether or not terminated) of the Employer shall be treated as
one defined benefit plan, and all defined contribution plans
(whether or not terminated) of the Employer shall be treated as
one defined contribution plan.

          (10) When the term "Employer" is used in this section,
it shall mean the Employer and any other corporation or division
which is a member of a controlled group of corporations (within
the meaning of Code Section 414(b), as modified by Code section
415(h)) of which the Employer is also a member.

          (e)  Annual Compensation:  A Participant's annual
compensation as determined solely for purposes of this section
and Article IX of the Plan.

          (1)  A Participant's Annual Compensation shall include:

          (i)  the Participant's earned income, wages, salaries,
and fees for professional services, and other amounts received
for personal services actually rendered in the course of
employment with the Employer maintaining the plan to the extent
that the amounts are includable in gross income (including, but
not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips and bonuses, fringe benefits,
reimbursements, and expense allowances);

          (ii)  Amounts described in Code sections 104(a)(3),
105(a) and 105(h), but only to the extent that such amounts are
includable in the gross income of the Participant;

          (iii)  Amounts paid or reimbursed by the Employer for
moving expenses incurred by a Participant, but only to the extent that 

 IV-14

such amounts are not deductible by the Participant under Code section 217;

          (iv)  The value of a non-qualified stock option granted
to a Participant, but only to the extent that the value of the
option is includable in the gross income of the Participant for
the taxable year in which granted; and

          (v)  The amount includable in the gross income of a
Participant upon making the election described in Code section
83(b).

          (2)  A Participant's Annual Compensation shall not
include:

          (i)  Employer contributions to a plan of deferred com
pensation which are not included in the Participant's gross
income for the taxable year in which contributed or Employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the Participant, or
any distributions from a plan of deferred compensation;

          (ii)  Amounts realized from the exercise of a non-
qualified stock option, or when restricted stock (or property)
held by the Participant either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture;

          (iii)  Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and

          (iv)  Other amounts which received special tax
benefits, or contributions made by the Employer (whether or not
under a salary reduction agreement) towards the purchase of an
annuity described in section 403(b) of the Code (whether or not
the amounts are actually excludable from the gross income of the
Participant).

Compensation for any limitation year is the compensation actually
paid or includable in gross income during such year.

 IV-15

          4.6  Excess Allocations:  If, pursuant to Section 4.5
immediately above, there is an excess allocation with respect to
a Participant for a Limitation Year, such excess amount shall be
disposed of as follows:

          (a)  In the event that the Participant is in the
service of the Employer in succeeding Limitation Years, then such
excess amounts shall not be distributed to the Participant, but
shall be carried over for the Participant's benefit and allocated
to the Participant's Salary Account for such succeeding
Limitation Years to the extent consistent with the limits in
Section 4.5.

          (b)  In the event that the Participant is not in the
service of the Employer in a succeeding Limitation Year for which
an allocation is to be made hereunder, then such excess amount
shall not be distributed to the Participant, but shall be
reapplied for the benefit of all remaining Participants subject
to the limits in Section 4.5.

          4.7  Fund for Exclusive Benefit of Participants: Except
as otherwise provided hereinafter (i) all assets of the Trust
Fund, including investment income, shall be retained for the
exclusive benefit of Participants and Beneficiaries, and shall be
used to pay benefits to such persons or to pay administrative
expenses of the Plan and Trust to the extent not paid by the
Employer, and (ii) contributions made by the Employer may not
under any circumstances revert to or inure to the benefit of the
Employer; except that, and notwithstanding anything contained
herein to the contrary, contributions (a) made by the Employer by
mistake of fact, or (b) conditioned upon the deductibility of the
contribution under Code section 404, shall be returned to the
Employer within 1 year of the mistaken payment or the
disallowance of the deduction (to the extent disallowed),
whichever is applicable.  Each contribution by the Employer is
expressly made contingent on the deductibility of such con
tribution for the year with respect to which the contribution is
made.

 V-1


                                ARTICLE V
                         Interests of Participants

          5.1  Accounts of Participants:  The Plan Administrator,
or its agent, shall maintain separate accounts on its books, for
recordkeeping purposes only, for each Participant.  A given
Participant may have two accounts if he has: (i) deferred a
percentage of his Eligible Pay pursuant to Section 4.1, and (ii)
made a rollover contribution pursuant to Section 4.4, i.e., a
Salary Deferral Account, and a Rollover Account.  The maintenance
of individual accounts is only for accounting purposes, and a
segregation of the assets of the Trust Fund to each account shall
not be required (except as the Trustee deems necessary under the
Brokerage Option).  Distributions and withdrawals from a
Participant's Account shall be charged to the appropriate account
at the time the transaction is processed.

          5.2  Investment of Participant Accounts:  The
investment options under the Plan are described in subsection
(a), subject to the limitations set forth in subsection (b) and
other provisions of the Plan.

          (a)  Investment Options: In accordance with the rules
provided in subsection (c) below, a Participant shall direct the
investment of the amounts credited to his Account to any of the
following separate investment options within the Trust Fund for
which he is eligible at the time:

          (1)  The Security Plus Fund:  This investment option,
available effective January 1, 1992, is an investment portfolio
comprised of investment funds and contracts issued by highly
rated banks and insurance companies and short-term securities.
The objective of the Fund is to provide, over a period of time, a
higher rate of return than average money market funds, while
preserving principal and providing liquidity.  The Fund's rate of
return will fluctuate and is not intended to provide a guaranteed
rate of return.  The Participant's interest in the fund will be
denominated as "units".  The value of a unit in this Fund will be
$1.00.  The number of units credited to a Participant will
fluctuate based upon the performance of the Fund.  As of January
1, 1992, two 1991 Guaranteed Income 

 V-2

Fund contracts, both issued by Metropolitan Life, were transferred to 
the Security Plus Fund. In addition to the transferred investment contracts, 
the Fund is expected to invest primarily in: (A) short-term investment funds
(including government short-term investment funds) that invest in
certificates of deposit, time deposits, bankers' acceptances,
commercial paper, U.S. Treasury and agency securities, and
mortgage and asset-backed securities; and (B) new investment
contracts issued by highly-rated insurance companies, banks, and
other financial institutions.  The transfer of funds invested in
the Security Plus Fund to other separate investment options
within the Trust Fund shall be subject to the following
restrictions:

          (i)  No amounts invested in the Security Plus Fund may
be transferred by a Participant directly to the Brokerage Option.
No amounts invested in the Security Plus Fund may be transferred
by a Participant indirectly to the Brokerage Option, i.e., by
first transferring the amounts to some other investment option
(or options) under the Plan, unless such amounts remain invested
in the intervening investment option (or options) for at least 3
months;

          (ii) A Participant can transfer amounts from the
Security Plus Fund into some other investment option (or options)
under the Plan no more than 12 times during the Plan Year; and

          (iii)     Withdrawals of amounts invested in the
Security Plus Fund are subject to the limitations specified in
Section 6.3(c).

          (2)  The Equity Index Fund:  This investment option is
a diversified stock fund, invested primarily in the Vanguard
Institutional Index Fund.  It is a passively managed fund
designed to mirror the performance of Standard and Poor's 500
Index, a broadly-based average of stock market performance.
Investments in this investment option are subject to
fluctuations, and there is no guarantee of future performance.
The Participant's interest in 

 V-3

the fund will be denominated as "units".  The value of a unit in this 
Fund will be $1.00.  The number of units credited to a Participant will 
fluctuate based upon the performance of the Fund.

          (3)  The Equity-Income Fund:  This fund is primarily
invested in the Fidelity Equity-Income Fund, which invests
primarily in income-producing stocks.  The fund's chief objective
is to provide reasonable income, although some consideration is
given to capital appreciation.  Amounts invested in this
investment option are subject to fluctuations, and there is no
guarantee of future performance.  The Participant's interest in
the fund will be denominated as "units".  The value of a unit in
this Fund will be $1.00.  The number of units credited to a
Participant will fluctuate based upon the performance of the
Fund.  Effective January 1, 1993, the Equity-Income Fund will no
longer accept future contributions.  The Equity-Income fund,
however, is currently scheduled to be available under the
Brokerage Option.

          (4)  The PepsiCo Capital Stock Fund:  This investment
option is invested primarily in Company Stock.  Earnings will be
applied primarily to the purchase of additional shares of Company
Stock.  Shares of Company Stock held by the Trustee, which have
been allocated to Participants' accounts, will be voted by the
Trustee as the Participant to whom such shares are allocated
directs in writing from time to time.  Any such shares with
respect to which the Participant does not give directions for
voting in a timely manner will not be voted by the Trustee. For
voting purposes, allocated fractional shares of Company Stock
will be aggregated into whole shares of stock and voted by the
Trustee to the extent possible to reflect the voting directions
of the Participants with respect to the whole shares of Company
Stock.  Any shares of Company Stock held by the Trustee which
have not yet been allocated to Participants' accounts will be
voted by the Trustee to the extent possible to reflect the voting
directions of Participants with respect to allocated shares of

 V-4

stock.  The Participant's interest in the fund will be
denominated as "units".  The initial value of a unit (as of July
1, 1992) in this Fund is $10.00 and thereafter the value of a
unit will fluctuate in response to various factors including, but
not limited to, the price of and dividends paid on Company Stock,
earnings and losses on other investments in the fund and the mix
of assets in the fund.  The number of units credited to a
Participant's account will not fluctuate based upon the
performance of the Fund.  Each Participant's investment in the
PepsiCo Capital Stock Fund will be based on the proportion of his
investment in the fund to the total investment in the fund of all
Plan Participants.

          The Company shall assist the Trustee in furnishing
Participants investing in the PepsiCo Capital Stock Fund with
proxy materials, notices and information statements at the time
voting rights are to be exercised.  In general, the materials to
be furnished Participants shall be the same as those provided to
security holders.

          Shares of Company Stock will be purchased for
Participant Accounts in the open market or in privately
negotiated transactions, at prices not in excess of the fair
market value of the Company Stock on the date of purchase.  Sales
of shares will also be made in the open market or in privately
negotiated transactions at prices not lower than the fair market
value of Company Stock on the date of sale.  The Trustee, or its
designated agent, may limit the daily volume of purchases and
sales to the extent it believes it will be in the interest of
Participants to do so.

 V-5

     (5)  The Brokerage Option:

               (i)  Description of Funds: This investment option
will be administered by State Street Bank and the agents it
employs as securities brokers to execute Participants' trades.
This option permits certain Participants and Beneficiaries to
invest all or a portion of their interest in the Plan in
additional choices for self-directed investment.  The Plan
Administrator shall publish written rules and procedures for the
election of these additional choices by Participants and
Beneficiaries, and may revise such rules and procedures at any
time and for any reason.  The investments expected to be
available under the Brokerage Option are generally as follows:
securities traded on the New York Stock Exchange, the American
Stock Exchange, and the NASDAQ National Market, and certain
Fidelity Mutual Funds as specified by the Plan Administrator.

               (A)  The following investments will not be
available through the Brokerage Option:  Non-taxable bonds;
options; futures; commodities; limited partnerships which are
unlisted on the New York or American Stock Exchange or NASDAQ
National Market; foreign securities which are unlisted on the New
York or American Stock Exchange or NASDAQ National Market;
commercial paper; bank investments (such as certificates of
deposits and bank investment contracts); physical assets (such as
coins, art, jewelry, and real estate); insurance investment or
insurance investment funds; mutual funds not sponsored by
Fidelity; and securities of the Company or its subsidiaries (even
if listed on the New York or American Stock Exchange or NASDAQ
National Exchange).

               (B)  The following trading practices are
prohibited under the Brokerage Option:  Short sales, margin
trades, third party trades, direct 

 V-6

trades, and any trades occurring outside the procedures established 
by the Plan Administrator.

          (ii) Restrictions:  Each Participant who participates
in the Brokerage Option shall have his interest in the Plan
reduced by any brokerage and fees (including fees charged by
Fidelity on account of one or more investments in a Fidelity
mutual fund) payable on their individual transactions and shall
also have his interest in the Plan reduced by a fee (initially
$4.20) for each month or part thereof that the Participant
participates in the Brokerage Option.  The fee will be taken from
the Plan in the following order: Security Plus Fund, Equity-Index
Fund, Equity Income Fund, PepsiCo Capital Stock Fund and the
Brokerage Option.  The Plan Administrator, and its agent, is
authorized to sell securities or other assets held within a
Participant's Account for the purpose of paying the fee described
in this subsection.  Investment in the Brokerage Option is
subject to the following restrictions:

               (A)  To commence investing under this program, the
Participant must first be eligible to enroll in the Brokerage
Option.  A Participant is eligible to enroll if he has at least
$1,000.00 in his Participant Account; completes and returns the
application as required by the Plan Administrator or its agent;
and his initial transfer election into the Brokerage Option is at
least $1,000.  Subsequent transfers to and from the Brokerage
Option must be at least $250 unless such transfer is to close the
Participant's account under the Brokerage Option.  All transfers
to the Brokerage Option must be from prior savings.

               (B)  No amounts invested either in the Security
Plus Fund or in the Guaranteed Income Fund may be directly
transferred to the Brokerage Option, and no amounts invested
either in the Security Plus Fund or in the Guaranteed Income Fund
may be indirectly transferred to the Brokerage Option, i.e., by
first transferring the amounts to some other 

 V-7

investment fund (or funds) under the Plan, unless such amounts 
remain invested in the intervening fund (or funds) for at least 3 months.

               (C)  Except as provided in the last sentence of
this clause (C), no security or investment held by a
Participant's account within the Brokerage Option may be
transferred or distributed directly to the Participant.  The
Participant must initially sell the security or investment.  The
Trustee will place the proceeds of such sale in a short-term
investment fund, designed to generate a money market rate of
return, within the Brokerage Option.  The proceeds will remain in
such account until the Participant instructs the Plan
Administrator or its agent to transfer all or a portion of such
proceeds into one or more of the other separate investment
options within the Trust Fund provided that the investment option
chosen by the Participant permits contributions.  The crediting
of earnings within the short-term investment fund and the
transfer of funds to other investment funds within the Trust Fund
may be delayed until after the settlement period for the class of
security sold by the Participant, ranging from one to five
business days.  In-kind distributions are permitted in the event
of a complete distribution of a Participant's interest as
specified under Section 6.1 or 6.2.

          (6)  The Guaranteed Income Fund:  This fund is
established through contractual arrangements with one or more
insurance companies or other financial institutions.  Effective
January 1, 1992, the Guaranteed Income Fund no longer accepts
additional deposits.  As of January 1, 1992, two 1991 Guaranteed
Income Fund contracts, both issued by Metropolitan Life, were
transferred to the Security Plus Fund.  The return on amounts
that remain invested in the Guaranteed Income Fund is determined
in accordance with the contract (or contracts) applicable to the
year in which the amounts were invested.  Guarantees of principal
and interest are provided solely by the 

 V-8

insurance company or other financial institution issuing the contract.  
The transfer of funds invested in the Guaranteed Income Fund to other 
separate investment funds within the Trust Fund will be restricted in the
following manner:

          (i)  No amounts invested in the Guaranteed Income Fund
for any Plan Year may be transferred by a Participant directly
into the Security Plus Fund or the Brokerage Option.  No amounts
invested in the Guaranteed Income Fund for any Plan Year may be
transferred by a Participant indirectly to the Security Plus Fund
or the Brokerage Option, i.e., by first transferring the amounts
to some other investment fund (or funds) under the Plan, unless
such amounts remain invested in the intervening fund (or funds)
for at least 3 months; and

          (ii) A Participant can transfer amounts from the
Guaranteed Income Fund into some other investment fund (or funds)
under the Plan no more than 12 times during the Plan Year.

               (b)  Maintaining Liquidity:  Notwithstanding
subsection (a) above, for the purpose of providing liquidity in
each of the separate investment options (other than the Brokerage
Option) under the Plan, the Trustee may invest a portion of each
fund or investment option under the Plan in cash or short-term
securities.  The percentage of assets held for this purpose is
normally expected to range from 2-10 percent, but under
extraordinary circumstances the percentages may be substantially
higher.  Consequently, the mix of cash, securities and other
investments in each of the investment funds could vary
significantly at any given time and the performance of any
particular fund may not match the performance of the fund or
stock, as the case may be, outside the Plan.  In the unlikely
event that the amount of liquid assets held by these funds is
insufficient to satisfy the immediate demand for liquidity under
the Plan, the Trustee, in consultation with the Plan
Administrator, may temporarily limit or suspend transfers of any
type (including withdrawals and distributions) to or from the

 V-9

investment options specified in subsection (a).  In any such
case, the Plan Administrator shall temporarily change the Plan's
Valuation Date or, in its discretion, the Valuation Date for a
specific option.  During this period, contributions to any
affected option may be redirected to substitute investments
chosen by the Trustee.

          (c)  Procedures for Investment Directions: A
Participant may direct the investment of the amounts credited to
him under the Plan into the investment options described in
subsection (a) only in accordance with this subsection.  A
Participant shall direct the investment, or change the direction
of the investment, of his future or existing investment by
directing the Plan Administrator through the telephone enrollment
system provided by the Plan Administrator for such purpose (or
through any other method made available by the Plan
Administrator) and by specifying whether the Participant's
investment instructions apply to existing savings, future
contributions or both.

          (1)  The Participant will have sole responsibility for
the investment of his savings and for transfers among the
available investment funds, and no named fiduciary or other
person will have any liability for any loss or diminution in
value resulting from the Participant's exercise of such
investment responsibility.  It is intended that section 404(c) of
ERISA will apply to a Participant's exercise of investment
responsibilities under this Article.

          (2)  In the case of an option other than the Brokerage
Option, a Participant's investment instruction or change in
investment instruction shall take effect as of the end of the day
on which the Participant gives such instruction or change to the
Plan Administrator (or its agent), provided the Participant
executes such instruction or change by 3:00 p.m. (Eastern time)
on a business day.  If the Participant executes his instruction
or change on a Saturday, Sunday, holiday or after 3:00 p.m.
(Eastern time) on a business day, such instruction or change will
become effective on the next following business day.

 V-10

          (3)  In the case of the Brokerage Option, a
Participant's investment instruction or change within the
Brokerage Option or fund transfers into the Brokerage Option
shall be effective in accordance with rules set forth by the Plan
Administrator consistent with the rules that govern the exchange
or fund in which Participants invest.

Any investment direction submitted by a Participant must specify,
in whole percentages (1 to 100), the percentage of his accounts
to be invested in any or all of the separate investment funds
maintained under the Plan.  If a Participant fails to submit a
statement of direction properly directing the investment of 100
percent of his accounts, and such failure is not corrected, the
Participant shall not be eligible to participate actively, or to
continue to participate actively, in the Plan; provided, however,
that amounts previously invested pursuant to a properly executed
statement of investment direction shall continue to remain
invested in the Fund or Funds so elected.  The rules for
transfers set forth in paragraphs (2) and (3) above are subject
to the last 3 sentences of subsection (b) above.

          (d)  Miscellaneous:

          (1)  It is expressly permissible under this Plan for
Trust assets to be invested in qualifying employer securities, as
that term is defined in section 407(d)(5) of ERISA, up to and
including 100 percent of the total Trust assets.  If Company
Stock is purchased other than on the open market, the Company
Stock shall be valued in good faith and based on all relevant
factors, including the sales prices of such stock, as reported on
the New York Stock Exchange, on the date of purchase.

               (2)  The separate investment funds made available
under the Trust Fund and their rules of operation and valuation
may be changed from time to time by agreement between the Company
and the Trustee.

               (3)  As of each Valuation Date, the Trustee will
determine the fair market value of the assets in each separate
investment fund of the Trust Fund, relying upon such evidence of
valuation as the Trustee deems appropriate.

 V-11

          5.3  Adjusting Account Balances:  As of the close of
business on each Valuation Date (before adjusting for
contributions, distributions and investment transfers),
Participants' Accounts shall be charged or credited with:

          (a)  Investment Expenses,

               (b)  Investment income, and

               (c)  Gains and losses in asset values,
which have occurred with respect to each separate option (and
each separate investment within the Brokerage Option) since the
preceding Valuation Date.  Thereafter, the final Account balances
as of the Valuation Date will be determined by adjusting the
amounts determined under the preceding sentence for
contributions, distributions and investment transfers.  The
allocation of Investment Expenses and investment results as of a
Valuation Date shall be in proportion to the final Account
balances in the fund or investment as of the preceding Valuation
Date.  Gains and losses in assets values as of a Valuation Date
shall be determined in accordance with rules of the Plan
Administrator and may not reflect the closing values of the
assets on such Valuation Date.

 VI-1


                                 ARTICLE VI

                        Distributions To Participants

          6.1  Termination of Employment:  Subject to Section
6.2, a Participant who incurs a Termination of Employment under
the Plan shall be entitled to receive the entire amount of his
interest in the Plan computed as of: (i) the Valuation Date on
which the final distribution form for the Participant is
processed by the Recordkeeper, or (ii) if the Participant's
interest in the Plan is $3,500 or less, the Valuation Date on
which the Recordkeeper processes the distribution of the
Participant's Account (such distribution to be processed as soon
as practicable after the 90 days specified in section 6.6(d)).
Subject to Section 6.6(a), the Participant's interest at
Termination of Employment shall be payable to the Participant as
a lump sum distribution as soon as practicable.

          6.2  Death:  Subject to Section 7.1(b), in the event of
the death of a Participant, the entire amount, if any, of the
interest of such Participant in the Plan shall be paid as
provided in Section 6.1, except that it shall be payable to such
Participant's Beneficiary or Beneficiaries determined in
accordance with Article VIII.

          6.3  Withdrawals:  Subject to the restriction on direct
withdrawals from the Brokerage Option specified in Subsection
(c), below, a Participant who has made a Salary Deferral
Contribution or a Rollover Contribution may withdraw certain
amounts credited to his Salary Deferral Account and Rollover
Account to the extent permitted by this section.

          (a)  Hardship Withdrawals:  In the case of a
Participant who has not yet attained the age of 59-1/2,
withdrawals shall only be permitted on account of the
Participant's hardship.  For this purpose, a withdrawal is made
on account of hardship only if the Plan Administrator (or its
delegate) determines the withdrawal is: (A) made on account of an
immediate and heavy financial need of the Participant, and (B)
necessary to satisfy this financial need.  Such determinations
are intended to follow applicable regulations and rulings issued
by the Internal Revenue Service.

 VI-2

          (1)  Immediate and Heavy Financial Need: The
determination of whether a Participant has an immediate and heavy
financial need shall be based on all of the relevant facts and
circumstances.  In addition, a distribution shall be deemed to be
made on account of an immediate and heavy financial need of the
Participant if the distribution is on account of:

          (i)  Expenses for medical care (within the meaning of
Code section 213(d)) incurred by the Employee, the Employee's
spouse or dependents;

          (ii)  A cost directly related to the purchase
(excluding mortgage payments) of a principal residence for the
Employee;

          (iii)  Payment of tuition and related educational fees
for the next 12 months of post-secondary education for the
Employee, the Employee's spouse, children or dependents; or

          (iv)  The need to prevent the eviction of the Employee
from, or a foreclosure on the mortgage of, the Employee's
principal residence.

For purposes of this paragraph, "dependent" means an Employee's
dependent within the meaning of Code section 152.

          (2)  Necessary for the Need:  A withdrawal shall be
considered necessary to satisfy a need described in paragraph (1)
only to the extent: (A) the amount of the withdrawal is not in
excess of the amount required to relieve such need, and (B) the
need cannot be satisfied from other resources that are reasonably
available to the Participant.  Determinations under this
paragraph shall be based on all of the relevant facts and
circumstances.  A distribution generally may be treated as
necessary to satisfy a financial need if the Plan Administrator
(or its delegate) relies upon the Participant's written
representation (unless the Plan Administrator has actual
knowledge to the contrary) that the need cannot reasonably be
relieved:

 VI-3

               (i)  Through reimbursement or compensation by
insurance or otherwise;

               (ii) By liquidation of the Participant's assets;

               (iii)     By cessation of Salary Deferral
Contributions;
               (iv) By other distributions or nontaxable loans
from plans maintained by an employer, or by borrowing from
commercial sources on reasonable commercial terms, in an amount
sufficient to satisfy the need.
For this purpose, a need cannot be treated as reasonably relieved
from the sources listed above if the effect would be to increase
the amount of the need.

          (3)  Maximum Withdrawal:  The amount that may be made
available to a Participant for hardship withdrawal may not
exceed:
               (i)  The sum of:

                    (A)  the Participant's total Salary Deferral
Contributions,
                    (B)  any earnings on the Participant's Salary
Deferral Contributions credited to the Participant's Account on
December 31. 1988, and

                    (C)  the Participant's total Rollover
Contributions (and contributions on behalf of the Participant to
any other accounts that may be provided for in the Appendix) plus
any earnings thereon; reduced by

          (ii) The amount of any prior withdrawals and
distributions to or on behalf of the Participant.
The amounts specified in this paragraph (except that specified in
subparagraph (i)(B)) are to be determined as of the Valuation
Date on which the withdrawal is processed.

 VI-4

     (4)  Administrative Procedures:  A withdrawal request under
this subsection shall be made on the form specified for this
purpose by the Plan Administrator.  For a withdrawal to be
approved, this form must be fully completed and the Participant
must provide such additional information as the Plan
Administrator (or its delegate) shall request.  The hardship
withdrawal shall be paid to the Participant as promptly as
practicable after its approval and shall not exceed the value of
the Participant's distributable interest.

     (b)  Post-Age 59-1/2 Withdrawals:  In the case of a
Participant who has attained age 59-1/2, such Participant shall
be eligible to withdraw amounts from his Account by submitting to
the Plan Administrator a request in such form and manner as the
Plan Administrator may provide, specifying the amount to be
withdrawn; provided, however, that a Participant shall be
ineligible to make a withdrawal under this subsection more than 2
times within the same calendar year.  Distribution shall be made
to the Participant as soon as practicable after the withdrawal
request is received by the Plan Administrator, based upon the
Participant's balance in his Account as of the Valuation Date the
withdrawal is processed.

     (c)  Order of Asset Liquidation for all Withdrawals:  In the
event the Participant's Account is invested in more than one
investment option, a partial withdrawal will be distributed pro-
rata from each of the investment options from which withdrawals
are available subject to the following requirements:  amounts
invested in the Security Plus Fund must be withdrawn before
amounts invested in the Guaranteed Income Fund can be withdrawn,
and amounts invested in the Guaranteed Income Fund shall be
withdrawn in reverse order of the Participant's investment in the
underlying contracts, i.e., the most recent contract shall be
liquidated first.  In addition, withdrawals directly from the
Brokerage Account are not permitted.

          6.4  Form of Distributions:  Distributions under the
Plan on account of Termination of Employment or death shall be
made in cash, except to the extent that a Participant elects to
receive: (i) his interest in the PepsiCo Capital Stock Fund in
whole shares 

 VI-5

of Company Stock; or (ii) securities held in his
Brokerage Option as permitted in Section 5.2(a)(5)(ii)(C).  An
election to receive an in-kind distribution shall not apply to
fractional shares, uninvested cash or amounts invested for
liquidity purposes, and shall not be available with respect to
hardship withdrawals under section 6.3(a).

          6.5  Errors in Participant's Accounts:  When an error
or omission is discovered in an account of a Participant, the
Plan Administrator and the Trustee shall be authorized to make
such equitable adjustments as may be appropriate as of the Plan
Year in which the error or omission is discovered.

          6.6  Commencement of Payments:  Notwithstanding
anything in the Plan to the contrary, the distribution of a
Participant's benefits hereunder shall be determined in ac
cordance with the provisions of this section and shall otherwise
comply with Code section 401(a)(9) and the regulations under
section 401(a)(9) including section 1.401(a)(9)-2.  In addition,
any provisions of the Plan that reflect Code section 401(a)(9)
(including subsection (b) below) override any other distribution
options in the Plan that are inconsistent with Code section
401(a)(9).

          (a)  Consent Requirements:  Effective as of January 1,
1985, if the value of a Participant's total interest in the Plan
exceeds $3,500 at the time a distribution is to be made, then
such interest shall not be distributed hereunder prior to the
Participant's attainment of age 65 or death unless the
Participant consents in writing, on a form prescribed by the Plan
Administrator, to the earlier distribution of his interest in the
Plan.  However, upon termination of the Plan, the Participant's
interest may, without the Participant's consent, be distributed
to him or transferred to another defined contribution plan (other
than an employee stock ownership plan as defined in Code section
4975(e)(7)) maintained by the Employer.

          (b)  Code Section 401(a)(14) Provisions:  Subject to
subsection (c) below, distribution of a Participant's interest in
the Plan shall not commence later than the 60th day after the
close of the latest of the following:

          (1)  The Plan Year in which the Participant attains age
               65,

 VI-6

          (2)  The Plan Year in which occurs the tenth
               anniversary of the date his participation commenced,

          (3)  The Plan Year in which occurs the Participant's
               Termination of Employment, or

          (4)  The Plan Year containing the date to which the
               Participant has elected in writing to defer commencement of 
               his Plan distribution.

If a distribution otherwise payable to a Participant or his
Beneficiary hereunder remains unpaid because the Plan
Administrator (after making reasonable efforts) cannot locate the
Participant or Beneficiary, the amount so distributable shall be
treated as a forfeiture under the Plan.  Following its
forfeiture, such amount shall be used to pay any expense of Plan
administration which may be charged to the Plan in accordance
with ERISA.  In the event the Participant or his Beneficiary is
located subsequent to the forfeiture of his Account, such Account
shall be restored, without adjustment for earnings or losses, and
payment to the Participant or Beneficiary shall be made no later
than 60 days after the date on which the Plan Administrator
locates the Participant or Beneficiary.

          (c)  Code Section 401(a)(9) Provisions:

          (1)  A Participant's total interest in the Plan must be
distributed to him no later than the Participant's required
beginning date.

          (i)  In the case of a Participant who is not a 5
percent owner after 1979, the "required beginning date" shall be
determined as follows:

          (A)  If the Participant attains age 70-1/2 after 1987,
the required beginning date is the April 1 following the calendar
year in which the Participant attains age 70-1/2 (but not before
April 1, 1990).

          (B)  If the Participant attains age 70-1/2 before 1988,
the required beginning date is the April 1 following the 

 V1-7

calendar year in which occurs the later of his Termination of Employment
or attainment of age 70-1/2.

               (ii)  In the case of a Participant who is a 5
percent owner after 1979, the required beginning date is the
April 1 following the later of:

          (A)  the calendar year in which the Participant attains
age 70-1/2, or

          (B)  the first calendar year in which the Participant
either becomes a 5 percent owner or terminates employment.
For purposes of this paragraph, a 5-percent owner is any
Participant who is a 5-percent owner as defined in section 416(i)
of the Code (determined in accordance with section 416 but
without regard to whether the Plan is top-heavy) at any time
during the Plan Year ending with or within the calendar year in
which such owner attains age 66-1/2 or any subsequent Plan Year.

               (2)  In the event a Participant dies on or after
his Annuity Starting Date but before actual payment has
commenced, the Participant's total interest in the Plan (if any)
shall be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's date of
death occurs.  Notwithstanding the preceding sentence, if the
Participant's designated beneficiary is his surviving spouse and
the surviving spouse dies after the Participant, but before
payments to such spouse begin, the provisions of this subsection
6.6(c)(2) shall be applied as if the surviving spouse were the
Participant.

          (d)  Cashout Distributions:  Subject to the last
sentence of this subsection, upon a Participant's death or other
Termination of Employment, the value of the Participant's total
interest in the Plan shall be automatically distributed to him in
a lump-sum cash distribution as soon as practicable following the
earlier of (i) the date the Participant reaches age 65 (or such
later date as permitted by the Plan 

 VI-8

Administrator in accordance with Code section 401(a)(14)); or 
(ii) 90 days after the Participant's Termination of Employment.  
However, such a Participant (or where the Participant has died, 
his Beneficiary as determined under Article VIII) can effect an earlier
distribution by submitting a properly completed final
distribution form in the manner specified by the Plan
Administrator.  By submitting a properly completed final
distribution form, the Participant may elect to receive an in-
kind distribution as provided in Section 6.4.  Notwithstanding
any provision of this Section 6.6(d) to the contrary, if such
Participant is disabled (within the meaning of the PepsiCo Long
Term Disability Plan) or has a total interest in the Plan in
excess of $3,500 and has not died, a distribution of his total
interest in the Plan will not occur until the earlier of: (i) the
date the Participant attains age 65 (or such later date as
permitted by the Plan Administrator in accordance with Code
section 401(a)(14)); or (ii) the date the Participant submits a
properly completed final distribution form in the manner
specified by the Plan Administrator.

          6.7  Payment for Benefit of Disabled or Incapacitated
Person:  Whenever, in the opinion of the Plan Administrator or
its agent, a person entitled to receive any payment of a benefit
hereunder is under a legal disability or is incapacitated in any
way so as to be unable to manage his financial affairs, the Plan
Administrator or its agent may direct the Trustee to make
payments to such person or to his legal representative or to a
relative or friend of such person for his benefit, or the Plan
Administrator or its agent may direct the Trustee to apply the
payment for the benefit of such person in such manner as the Plan
Administrator or its agent considers advisable.  Any payment of a
benefit or installment thereof in accordance with the provisions
of this section shall be a complete discharge of any liability
for the making of such payment under the provisions of the Plan.

          6.8  No Other Benefits or Withdrawals:  Except as
expressly provided for in this Article VI or the Appendix, no
individual, whether a Participant, former Participant,
Beneficiary or otherwise, shall be entitled to any distribution
or withdrawal of funds from the Trust Fund.


 VII-1
                              ARTICLE VII
                               Plan Loans

          7.1  Eligibility for Plan loans:   Subject to the
restrictions set forth in this Article VII, the opportunity to
take a Plan loan shall be made available to any Participant who,
at the time such loan is to be made:

               (a)  is actively employed by an Employer who has
                    agreed to participate in the loan program;

               (b)  has a minimum account balance of $2,000 in
                    the Plan;

               (c)  has not defaulted on a Plan loan within the
                    prior two years;

                    and

               (d)  consents to and authorizes repayment of the
                    loan through payroll deductions.

Employers that are not participating in the loan program may be
designated by the Plan Administrator from time to time.  The
requirement of subsection (a) above shall be deemed satisfied in
the case of a Participant who is not currently employed if the
Participant is a party in interest within the meaning of ERISA
section 3(14).  For purposes of subsection (c) above, the time of
default shall be determined under Section 7.9.

          7.2  Application Procedure:   A participant shall apply
for a loan by calling into the telephone system established by
the Plan Administrator and providing the requested information
("Telephone Application").  As soon as practicable after the
Participant's Telephone Application, the Plan Administrator shall
send such Participants a promissory note, an authorization form
for withholding loan payments from the Participant's pay, a
document granting the Plan a security interest in the
Participant's Plan account, and any other documents the Plan
Administrator deems appropriate ("Application Forms").  The
promissory note shall state the amount and term of the loan, the
applicable interest rate and repayment schedule, and other
information as determined by the Plan Administrator.  To complete
the application, the Participant must properly fill out, sign and
return the Application 

 VII-2

Forms so that they are received by the Plan Administrator within 30 
days of the date the Application Forms are prepared by the Plan.  
The Plan Administrator shall approve a Participant's loan application 
if the Participant:

               (a)  is eligible for a loan pursuant to Article
                    7.1.
               (b)  has properly completed and timely returned
                    the Application Forms, and
               (c)  is requesting a loan that meets the terms of
                    the Article VII and the summary plan description 
                    for this Plan.

          7.3  Loan Amount:  A Plan loan shall not be less than
$1,000 nor, when aggregated with all other outstanding loans to
such borrowing Participant from qualified retirement plans of the
Company and any affiliated companies, exceed the least of
(rounded down to the nearest hundred):

               (a)  $50,000 (reduced by the excess of (i) the
Participant's highest outstanding loan balance during the
preceding one-year period ending on the day before the date the
loan was made over (ii) the outstanding balance of loans from the
Plan on the date the loan is made);

               (b)  50% of the Participant's account balance
under the Plan;

               (c)  100% of the value of the Participant's
investments in the following "Core" Funds:   PepsiCo Capital
Stock, Security Plus, Vanguard Equity Index and Fidelity Equity
Income; or

               (d)   the maximum loan amount that can be
amortized by the Participant's net pay (determined under Section
7.8)

 VII-3

The value of the Participant's account balance and investment in
the Core Funds shall be based on the market values of such items
at the time of the Participant's Telephone Application or the
issuance of the loan, whichever is less.


          7.4  Maximum Number of Outstanding Loans and
Refinancing:

               (a)  A Participant shall not have more than one
loan outstanding from the Plan at any time.  Subject to
subsection (b), no loan may be made to a Participant until the
repayment of any previous loan to such Participant.

               (b)  A Participant with an outstanding loan from
the Plan is eligible to apply for a refinanced loan, provided the
refinanced loan is issued at least two years after issuance of
the outstanding loan.  A refinanced loan shall meet all the
requirements for a loan set forth in this Article VII.  Its
proceeds shall first be applied to repay the balance of the
outstanding loan,, with any remainder payable to the Participant
as cash.  The interest rate, fees, term and repayment schedule
applicable to a refinanced loan shall be determined without
reference to the original loan.

          7.5  Effect on Participant's Investment:  A loan shall
constitute a segregated investment solely of the Account of the
borrowing Participant.

               (a)  When initially made, a loan shall be funded
from the borrowing Participant's core Fund investments, prorated
based on the Participant's balance in each Core Fund.

               (b)  All repayments of principal and related
interest and any gains and losses on a loan shall be credited to
the borrowing Participant's account.  Loan repayments shall be
invested in accordance with the Participant's current investment
direction for Salary Deferral Contributions.  If the Participant
does not have an investment direction in effect on the date of
the Participant's Loan Application, the Participant must provide
an investment direction as part of his loan application.  When a
selected investment is no longer available, or 

 VII-4

when otherwise necessary, loan repayments shall be invested in the 
manner specified by the Plan Administrator from time to time.

               (c)  A loan shall be adequately secured at all
times.  All loans are secured by the portion of the borrowing
Participant's Account that is invested in the Participant's loan.
If the principal amount of a loan immediately after its issuance
does not exceed 50 percent of the Participant's Account as of
such time, the loan shall be deemed adequately secured at all
times hereunder.

          7.6  Fees:  Following the issuance of a loan, the
borrowing Participant shall pay a one-time origination fee.  For
each month or part thereof the loan remains outstanding the
borrowing Participant shall pay a monthly administration fee.
Such fees shall be deducted from the Participant's Account at the
end of the applicable month.  They shall be charged against the
position of the Account that is not invested in the loan, in
accordance with rules adopted by the Plan Administrator.  The
fees applicable to a Participant's loan shall be determined on
the date of the Participant's Telephone Application and shall not
change while such loan is outstanding.

          7.7  Interest Rate:  Plan loans shall bear a reasonable
rate of interest that provides the Plan with a return
commensurate with the interest rates charged by persons in the
business of lending money for loans which would be made under
similar circumstances as part of a similar nationwide loan
program.  To this end, the Plan Administrator shall adopt rules
and procedures for redetermining on a monthly basis the interest
rate applicable to new Plan loans.  The interest rate for any
loan shall be fixed for the period of the loan and shall be
determined as of the date of the related Telephone Application.
No interest rate shall be less than the applicable federal rate
in effect under Section 1274(d) of the Code, as of the day on
which the loan was initialed, compounded annually.

 VII-5

          7.8  Term and Repayment:

               (a)  Term:  Subject to subsections (c) through
(e), the term of a loan shall be not less than 1 year nor greater
than 4 years, measuring form the date of issuance, and shall be
an even multiple of six months.

               (b)  Repayment:  Subject to subsections (c)
through (e), a borrowing Participant shall repay his outstanding
loan by making substantially level amortization payments at the
interval determined by the Plan Administrator.  When a
Participant is receiving net pay to the extent possible.  For
this purpose, "net pay" shall mean a Participant's pay from an
Employer, reduced  by applicable taxes and such other payroll
deductions that are accorded priority by payment to the Plan
Administrator shall be required in the case of a Participant who
is on an authorized leave of absence or long term disability, or
a Participant who becomes a foreign service employee.  For
purposes of this subsection, a loan is not considered outstanding
following its default.

               (c)  Prepayment:  A Participant may prepay his
entire outstanding loan balance without penalty after first
notifying the Plan Administrator.  Upon notification, the Plan
Administrator shall make the necessary administrative
arrangements to permit repayment and shall advise the Participant
of the payment-in-full amount and its due date.  No partial
prepayments are permitted, and no payment-in-full amount will be
accepted after its due date.

               (d)  Terminating Employees:  Notwithstanding
subsections (a) and (b), an outstanding loan shall become
immediately due and payable in full if the borrowing Participant
retires, dies or otherwise terminates employment.  For purposes
of this subsection, a Participant's employment shall be deemed to
continue:  (1) while he is receiving long term disability
benefits and making loan repayment directly to the Plan
Administrator, or (2) while he is repaying his loan through
payroll deduction from salary continuation or other similar
payments.

 VII-6

               (e)  Termination of Loan Program:  In the event
the Plan terminates or the portion of the Plan applicable to a
Participant terminates, the Participant's loan shall become due
and payable in full immediately.

          7.9  Loan Default:  A loan shall be in default if:
               (a)  the borrowing Participant is delinquent on
                    more than 12 weeks of scheduled loan repayment 
                    amounts;   

               (b)  the loan becomes due and payable and the
                    Participant fails to pay the outstanding 
                    principal amount plus accrued interest within 60 days;

               (c)  the term of the loan has been extended to
                    more than 56 months as a result of the Participant's 
                    failure or inability to make timely loan payments; or

               (d)  there occurs such other circumstances as the
                    Plan Administrator considers to be a default in order 
                    to protect the interests of the Plan.

A default on a Plan loan occurs on the date the first of the
preceding conditions is met.  If a default on a Participant's
Plan loan occurs, the Plan shall have the right to foreclose on
the Participant's security interest in his Account, and shall do
so on or after the first distributable event for such Participant
described in Article VI (other than a hardship distribution event
pursuant to Section 6.3(a)).

          7.10 Nondiscrimination:  Loans shall be made available
to all Participants who meet the requirements set forth in
section 7.1 on a reasonable equivalent basis, except that the
Plan Administrator may make reasonable distinctions based on
other obligations of the Participant, state law requirements
affecting payroll deductions and other factors that may adversely
affect the ability to assure repayment through payroll deduction.
The Plan Administrator may refuse a requested loan where it
determines that timely repayment of the loan through payroll
deduction is not assured.

          7.11 Collins Food International, Inc.  With respect to
a borrowing Participant:  (i) who is employed by Colllins Food
International, Inc. before becoming employed by Kentucky Fried
Corporation and (ii) who has a loan outstanding under the Plan,
the provisions 

 VII-7

of this Article VII shall apply.  In addition, the
terms of the promissory note for such outstanding loan shall
govern to the extent not in conflict with this Plan or applicable
federal law.

          7.12 Miscellaneous:

               (a)  Additional Documentation:  A Participant
shall execute any additional documents as required by the Plan
Administrator that correct ministerial errors in the Application
Forms, or that are required for proper administration of the
loan.
               (b)  Agent of Plan Administrator:  The Plan
Administrator may designate an exclusive agent for purposes of
administration of some or al of the loan program, and to such
extent any references in the Article VII to the Plan
Administrator shall mean the designated agent.

               (c)  Power to Amend Outstanding Loans:  It is
specifically intended that the Company's power to amend the Plan
set forth in Article XI applies to loans from this Plan that are
outstanding (including loans in default) at the time of the
amendment.

 VIII-1


                              ARTICLE VIII

                        Determination of Beneficiary

          A Participant's Beneficiary under the Plan shall be
determined in accordance with this Article.  In the event of a
Participant's death, any interest of the Participant in the Plan
shall be payable to such Beneficiary in accordance with Section
6.2.

          8.1  Certain Married Participants:  A Participant's
Beneficiary shall be determined in accordance with this Section
if:  (i) the Participant is married on the date of his death, and
(ii) the Participant is credited with at least one Hour of
Service after August 22, 1984.

          (a)  Deaths After November 13, 1984:

          (1)  Qualified Designations:  If a Participant covered
by this section dies after November 13, 1984, and has a Qualified
Designation (as hereinafter defined) in effect on the date of his
death, then such Participant's Beneficiary shall be the person or
persons designated by the Participant in the most recent
Qualified Designation on file with the Plan Administrator.  For
purposes of this subsection, a "Qualified Designation" is any
Designation of Beneficiary form filed by a Participant which
names someone other than the Participant's spouse as a primary
beneficiary, and which meets the requirements of subparagraphs
(i) or (ii) below:

          (i)  A Participant's Designation of Beneficiary form
               meets the requirements of this subparagraph if:

          (A)  such designation is consented to in writing by the
               spouse to whom the Participant is married on the date 
               of his death,

          (B)  the spouse's consent acknowledges the effect of
               the designation,

 VIII-2

          (C)  the spouse's consent is witnessed by a notary
               public or an official designated by the Plan Administrator, 
               and

          (D)  the designation is signed by the Participant and
               satisfies any other requirements which are prescribed by 
               the Plan Administrator.

          (ii)  A Participant's Designation of Beneficiary form
                meets the requirements of this subparagraph if:

          (A)  at the time such form is filed, it is established
               to the satisfaction of the Plan Administrator (or its 
               authorized representative) that the consent required under 
               subparagraph (i) may not be obtained because the 
               Participant's spouse cannot be located or because of such 
               other circumstances as may be specified by Internal Revenue 
               Service Regulations,

          (B)  the Participant is legally separated or the Participant has 
               been abandoned (within the meaning of local law) and (I) 
               the Participant has a court order to such effect, and
               (II) there is no qualified domestic relations order (within 
               the meaning of Code section 414(p)) which requires spousal 
               consent to the Participant's elections covered by this 
               section, and

          (C)  the designation is signed by the Participant and
               satisfies any other requirements which are prescribed 
               by the Plan Administrator.

Consent by a spouse, or establishment that a spouse's consent
cannot be obtained, shall be effective only with respect to such
individual spouse.  If the spouse is legally incompetent to give
consent, consent may be given by the spouse's legal guardian
(even if the guardian is the Participant).  Once a spouse has
given consent to an election of the Participant, such consent
shall be irrevocable.

 VIII-3

          (2)  No Qualified Designation:  If a Participant
covered by this Section dies after November 13, 1984, and does
not have a Qualified Designation in effect on the date of his
death, then notwithstanding any Designation of Beneficiary form
the Participant may have completed, such Participant's sole
Beneficiary shall be his spouse. A Participant's Qualified
Designation shall not be considered to be in effect hereunder if
all the Participant's designated Beneficiaries have predeceased
the Participant.

     (b)  Deaths Before November 14, 1984:  If a Participant
described in this Section dies before November 14, 1984, then
notwithstanding any Designation of Beneficiary form the
Participant may have completed, such Participant's Beneficiary
for one-half of his interest in the Plan shall be such
Participant's spouse. If the amount payable to the Participant's
spouse pursuant to the preceding sentence would exceed $3,500,
then notwithstanding any other provision contained herein, such
one-half of the Participant's interest shall be payable to the
spouse as a life annuity unless the spouse consents in writing to
the distribution of such amount as a lump sum.  The remaining one-
half of the Participant's interest in the Plan shall be payable
to the Participant's Beneficiary determined in accordance with
Section 8.2 (as if such Section applied with respect to the
Participant).

          8.2  Other Participants:  A Participant's Beneficiary
shall be determined in accordance with this Section if:  (i) the
Participant is not married on the date of his death, or (ii) the
Participant is not credited with an Hour of Service after August
22, 1984.

          (a)  Except as provided in subsections (b) and (c)
below, the Beneficiary of a Participant covered by this Section
shall be the person or persons designated by the Participant on
the most recent Designation of Beneficiary form on file with the
Plan Administrator.  A Designation of Beneficiary form shall not
be taken into account under this section unless it has been
signed by the Participant.

  VIII-4

          (b)  In the case of a Participant covered by this
Section who is married at death, any Designation of Beneficiary
form executed by such Participant after December 31, 1984 shall
not be effective hereunder unless such form meets the 
requirements of Section 8.1(a)(1)(i) or (ii).

          (c)  In the event benefits became payable upon the
death of a Participant described in this Section and no
Beneficiary has been properly designated as provided in
subsections (a) and (b), or if all such designated Beneficiaries
shall have predeceased the Participant, then the Participant's
sole Beneficiary hereunder shall be his estate.


 IX-1

                          ARTICLE IX

                        Administration


          9.1  Allocation of Responsibility Among Fiduciaries for
Plan and Trust Administration:  The Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations
as are specifically given them under this Plan or the Trust
instrument.  The Plan Administrator shall have the sole
responsibility for the administration of the Plan, which
responsibility is specifically described in this Plan and the
Trust instrument, except where an agent is appointed to perform
administrative duties as specifically agreed to by the Plan
Administrator and the agent.  The Trustee shall have the sole
responsibility for the administration of the Trust and the
management of the assets held under the Trust, except where an
investment manager has been appointed, all as specifically
provided in the Trust instrument.  Each Fiduciary warrants that
any directions given, information furnished, or action taken by
it shall be in accordance with the provisions of the Plan or the
Trust instrument, as the case may be, authorizing or providing
for such direction, information or action.  Furthermore, each
Fiduciary may rely upon any direction, information or action of
another Fiduciary as being proper under this Plan or the Trust,
and is not required under this Plan or the Trust instrument to
inquire into the propriety of any direction, information or
action.  It is intended under this Plan and the Trust instrument
that each Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under
this Plan and the Trust instrument and shall not be responsible
for any act or failure to act of another Fiduciary.  No Fiduciary
guarantees the Trust in any manner against investment loss or
depreciation in asset value.

          9.2  Administration:  The Plan shall be administered by
the Plan Administrator which may appoint or employ individuals to
assist in the administration of the Plan and which may appoint or
employ any other agents it deems advisable, including legal
counsel, actuaries and auditors to serve at the Plan
Administrator's direction.  All usual and reasonable expenses of
the Plan Administrator in administering the Plan may be paid in
whole or in part by the 

 IX-2

Company, and any expenses not paid by the Company shall be paid by 
the Trustee out of the principal or income of the Trust.

          9.3  Claims Procedure:  The Plan Administrator, or a
party designated by the Plan Administrator, shall have the
exclusive discretionary authority to construe and to interpret
the Plan, to decide all questions of eligibility for benefits and
to determine the amount of such benefits, and its decision on
such matters are final and conclusive.  Any exercise of this
discretionary authority shall be reviewed by a court under the
arbitrary and capricious standard, (i.e., the abuse of discretion
standard).  If, pursuant to this discretionary authority, an
assertion of any right to a benefit by a Participant or
beneficiary is wholly or partially denied, the Plan
Administrator, or a party designated by the Plan Administrator,
will provide such claimant a comprehensible written notice
setting forth:

          (a)  The specific reason or reasons for such denial;

          (b)  Specific reference to pertinent Plan provisions on
               which the denial is based;

          (c)  A description of any additional material or
               information necessary for the claimant to submit to 
               perfect the claim and an explanation of why such material 
               or information is necessary; and

          (d)  A description of the Plan's claim review
               procedure.  The claim review procedure is available upon 
               written request by the claimant to the Plan Administrator, 
               or the designated party, within 60 days after receipt by the 
               claimant of written notice of the denial of the claim, and 
               includes the right to examine pertinent documents and submit 
               issues and comments in writing to the Plan Administrator, 
               or the designated party.  The decision on review will be 
               made within 60 days after receipt of the request for review, 
               unless circumstances warrant an extension of time not to 
               exceed an additional 60 days, and shall be in writing and 
               drafted in a manner calculated to be understood by
               the claimant, and include specific reasons for the decision 
               with references to the specific Plan provisions on which the 
               decision is based.

 IX-3

If circumstances warrant, the Plan Administrator shall provide
the claimant a written notice, prior to the end of the 90-day
period for processing the claim, extending such period by up to
an additional 90 days and indicating the circumstances requiring
the extension and the date by which the Plan Administrator
expects to render its decision.  If the Plan Administrator fails
to provide a comprehensible written notice stating that the claim
is wholly or partially denied and setting forth the information
described in (a) through (d) above within the 90-day processing
period and if no extension of such 90-day period is made, the
claim shall be deemed denied.  Once the claim is deemed denied,
the Participant shall be entitled to the claims review procedure
described in subsection (d) above.  Such review procedure shall
be available upon written request by the claimant to the Plan
Administrator within 60 days after the claim is deemed denied.
Any claim referenced in this section that is reviewed by a court,
arbitrator, or any other tribunal shall be reviewed solely on the
basis of the record before the Plan Administrator.  In addition,
any such review shall be conditioned on the claimants having
fully exhausted all rights under this section.

          9.4  Records and Reports:  The Plan Administrator shall
exercise such authority and responsibility as it deems
appropriate in order to comply with ERISA and government
regulations issued thereunder relating to records of
Participants' service and benefits; notifications to
Participants; reports to, or registration with, the Internal
Revenue Service; reports to the Department of Labor; and such
other documents and reports as may be required by ERISA.

          9.5  Other Administrative Powers and Duties:  The Plan
Administrator shall have such powers and duties as may be
necessary or desirable to discharge its functions hereunder,
including:

          (a)  To exercise its discretionary authority to
construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder;

          (b)  To prescribe procedures to be followed by
Participants or Beneficiaries filing applications for benefits;

 IX-4

          (c)  To prepare and distribute, in such manner as the
Plan Administrator determines to be appropriate, information
explaining the Plan;

          (d)  To receive from employees and agents and from
Participants such information as shall be necessary for the
proper administration of the Plan;

          (e)  To receive, review and keep on file (as it deems
convenient or proper) reports of the financial condition, and of
the receipts and disbursements, of the Trust from the Trustee;

          (f)  To appoint or employ individuals or other parties
to assist in the administration of the Plan and any other agents
it deems advisable, including accountants, actuaries and legal
counsel; and

          (g)  To delegate to other persons or entities, or to
designate or employ persons to carry out any of the Plan
Administrator's fiduciary duties or responsibilities or other
functions under the Plan.

          9.6  Rules and Decisions:  The Plan Administrator may
adopt such rules and procedures as it deems necessary, desirable,
or appropriate.  To the extent practicable, all rules and
decisions of the Plan Administrator shall be uniformly and
consistently applied to all Participants in similar
circumstances.  When making a determination or calculation, the
Plan Administrator shall be entitled to rely upon information
furnished by a Participant or beneficiary, the legal counsel of
the Plan Administrator, or the Trustee.

          9.7  Procedures:  The Plan Administrator shall keep all
necessary records and forward all necessary communications to the
Trustee.  The Plan Administrator may adopt such regulations as it
deems desirable for the administration of the Plan.

          9.8  Authorization of Benefit Distributions:  The Plan
Administrator shall issue directions to the Trustee concerning
all benefits which are to be paid from the Trust pursuant to the
provisions of the Plan, and shall warrant that all such
directions are in accordance with this Plan.

          9.9  Application and Forms for Distributions:  The Plan
Administrator may require a Participant to complete and file with
the Plan Administrator an application for a 

 IX-5

distribution and all other forms approved by the Plan Administrator, 
and to furnish all pertinent information requested by the Plan 
Administrator. The Plan Administrator may rely upon all such information 
so furnished it, including the Participant's current mailing
address, age and marital status.

 X-1                              
                               
                               ARTICLE X

                              Trust Fund

          All contributions made by the Employers, or the Company
on behalf of the Employers, under this Plan shall be paid to the
Trustee and deposited in the Trust Fund or with an insurance
company or a financial institution pursuant to a contract to be
held and invested in accordance with the Trust instrument. Assets
of other plans maintained by the PepsiCo Organization, which meet
the requirements of Code section 401, may be commingled, for
investment purposes only, through one or more master trust
arrangements with the assets of this Plan.  The Company shall
have the right to appoint an investment manager or investment
managers (as defined in section 3(38) of ERISA) to manage all or
any part of the assets of the Trust Fund.

 XI-1

                         ARTICLE IX

                    Amendment of the Plan

          The Company shall have the right at any time by
instrument in writing, duly executed and acknowledged and
delivered to the Trustee, to modify, alter or amend this Plan in
whole or in part.  However, except as permissible under the Code
and ERISA, no amendment shall:

               (a)  Reduce the amounts in any Participant's
Account because of forfeiture or reduce the vested right or
interest to which any Participant or Beneficiary is then entitled
under this Plan;

               (b)  Eliminate an optional form of benefit with
respect to a Participant's Account as of the date of the
amendment;

               (c)  Cause or authorize any part of the Trust Fund
to revert or be refunded to the Employer; or

               (d)  Cause any assets of the Trust to be used for,
or diverted to, purposes other than for the exclusive benefit of
Participants and their Beneficiaries (other than such part as is
required to pay taxes and expenses of administration).
To the extent permitted under the Code, the Company shall have
the right to amend the Plan at any time, retroactively or
otherwise, in such respects and to such extent as may be
necessary to qualify it under existing and applicable laws and
regulations in order to make available to the Employers the tax
benefits associated with qualified plans, including the full
deduction for tax purposes of the Employer contributions made
hereunder.  A participating Employer shall not have the right to
amend the Plan.  Notwithstanding any provision herein to the
contrary, the Company may by such amendment decrease or otherwise
affect the rights of Participants hereunder if, and to the
extent, necessary to accomplish such purpose.

 XII-1

                           ARTICLE XII

                     Termination of the Plan

          The Plan herein provided for has been established by
the Company with the bona fide intention that it shall be
continued in operation indefinitely.  However, the Company re
serves the right at any time to terminate or to partially
terminate the Plan.  In addition, a participating Employer may
cease participation in the Plan with respect to its Employees.

          Should the Company decide to terminate the Plan, the
Trustee shall be notified of such event in writing and shall
proceed at the direction of the Plan Administrator to handle the
assets of the Trust Fund, as follows:  

          First, to the extent determined by the Plan
Administrator, to pay any due and accrued expenses and
liabilities of the Trust and any expenses involved in the
termination.

          Second, to pay to Participants in the Plan who are
active Employees affected by such termination the amount of their
interest in the Trust Fund, as soon as permitted by applicable
law, as determined by the Plan Administrator.  If some or all of
the Participants may not receive distributions of their interest
at the time of such termination or cessation, the Plan
Administrator may in its sole discretion direct the Trustee to
segregate each such Participant's interest to a savings account,
certificate of deposit, or other suitable investment for
distribution at the appropriate future time.

          Notwithstanding the foregoing, the Trustee shall not be
required to make any distribution from the Trust in the event the
Plan is terminated until such time as the Internal Revenue
Service shall have determined in writing that such termination
will not adversely affect the prior qualification of the Plan.

 XIII-1

                            ARTICLE XIII

                            Miscellaneous

          13.1  Participants' Rights; Acquittance:  Except to the
extent required or provided for by a mandatory law as in effect
and applicable hereto from time to time, neither the
establishment of the Trust hereby created, nor any modification
thereof, nor the creation of any fund or account, nor the payment
of any distributions, shall be construed as giving to any
Participant or other person any legal or equitable right against
the Employer, or any officer or employee thereof, or the Trustee
or the Plan Administrator except as herein provided; nor shall
any Participant have any legal right, title or interest in this
Trust or any of its assets, except in the event and to the extent
that amounts may actually be distributable to him hereunder, and
the same limitations shall be applicable with respect to
distributions upon death which may be payable to the
Beneficiaries of a Participant.  Under no circumstances shall the
terms of employment of any Participant be modified or in any way
affected hereby.  This Plan and Trust shall not constitute a
contract of employment nor afford any individual any right to be
retained in the employ of the Employer.

          13.2  Nonalienation of Benefits:

          (a)  In General:  Except as provided in subsection (b)
below, benefits payable under this Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution,
or levy of any kind, either voluntary or involuntary, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits
payable hereunder, shall be void.  The Trust Fund shall not in
any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any person entitled to
benefits hereunder.

          (b)  Qualified Domestic Relations Orders: To the extent
mandated by law, the Plan Administrator shall comply with a
qualified domestic relations order, as defined by Code section
414(p)(1)(A), which requires that all or part of a Participant's

 XIII-2

interest in the Plan be paid to an alternate payee, i.e., the
spouse, former spouse, child or other dependent of such
Participant.  If the Plan Administrator receives an order which
purports to be a qualified domestic relations order, the Plan
Administrator shall in accordance with such procedures and rules
as it may establish:  (i) determine the qualified status of such
qualified domestic relations order under Code section 414(p)(6),
and (ii) if satisfied that the qualified domestic relations order
meets the requirements of Code section 414(p), direct the Trustee
to comply with the qualified domestic relations order and pay
amounts from the Trust Fund in accordance therewith.  A qualified
domestic relations order may not require the Plan to make a
distribution to an alternate payee prior to the date the
Participant terminates employment or, if earlier, the date the
Participant attains age 50.  However, the Plan may make a
distribution to an alternate payee prior to such date in
accordance with permissive terms of a qualified domestic
relations order.  Except as otherwise expressly provided in a
qualified domestic relations order, no consent by a Participant
or alternate payee shall be required in applying the provisions
of Section 6.6 to an alternate payee's interest in the Plan.  For
purposes of the investment options under Article V and the
determination of the amount of a distribution under Article VI,
an alternate payee, with respect to his interest in the Plan,
shall be treated as a Participant would with respect to his
Account.

Neither the Plan, the Company, the Employer, the Plan
Administrator nor the Trustee shall be liable in any manner to
any person, including any Participant or Beneficiary, for
complying with a domestic relations order that is considered a
qualified domestic relations order in accordance with the
provisions of Code section 414(p).

          13.3  Actions Involving the Trust:  In any action or
proceeding involving the Trust Fund, or any property constituting
part or all thereof, or the administration thereof, the Company,
the Employer the Plan Administrator, and the Trustee shall be the
only necessary parties and no employees or former employees of
the Employer or their Beneficiaries or any 

 XIII-3

other person having or claiming to have an interest in the Trust 
Fund or under the Plan shall be entitled to any notice or service of 
process.

          Any final judgment which is not appealed or appealable
that may be entered in any such action or proceeding shall be
binding and conclusive on the parties hereto, the Plan
Administrator, the Trustee and all persons having or claiming to
have any interest in the Trust Fund or under the Plan.

          13.4  Qualification of Plan as a Condition:  This
amendment and restatement of the Plan is based upon the condition
subsequent that it shall be approved and qualified by the
Internal Revenue Service as meeting the requirements of the
Internal Revenue Code and regulations issued thereunder with
respect to employees' plans and trusts, including a salary
reduction arrangement, so as to permit, among other incidents to
such qualified plans, the Employer to deduct for income tax
purposes the amount of its contributions to the Plan as set forth
herein, and so that such contributions will not be taxable at the
time of contribution to the Participants as income.  Therefore,
if when this Plan is submitted for qualification and approval by
the Internal Revenue Service, the Internal Revenue Service
determines that the Plan does not meet the qualification
requirements of the Internal Revenue Code for the purposes
specified in the preceding sentence, and the deficiencies
precluding qualification may not be corrected by amendment
effective as of the Effective Date, then regardless of any other
provision herein contained, this Plan shall be and become null
and void ab initio, and any contributions under the Plan for any
fiscal year of an Employer commencing on or after the Effective
Date shall be returned to the Employers for the benefit of the
Employees on whose behalf the contribution was made to the Trust.

          13.5  Successor to the Company:  In the event of the
dissolution, merger, consolidation or reorganization of the
Company, provision may be made by which the Plan and Trust will
be continued by the successor; and, in that event, such successor
shall be substituted for the Company under the Plan. The
substitution of the successor shall constitute an assumption of
Plan liabilities by the successor and the successor shall have
all the powers, duties and responsibilities of the Company under
the Plan.

 XIII-4

          13.6  Transfer of Plan Assets:  In the event of any
merger or consolidation of the Plan with, or transfer in whole or
in part of the assets and liabilities of the Trust Fund to
another trust fund, held under any other plan of deferred
compensation maintained or to be established for the benefit of
all or some of the Participants of this Plan, the assets of the
Trust Fund applicable to such Participants shall be transferred
to the other trust fund only if:
          (a)  Each Participant would, if either this Plan or the
other plan then terminated, receive a benefit immediately after
the merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer, if the
Plan had then terminated;

          (b)  Resolutions of the Board of Directors of the
Employer of the affected Participants, shall authorize such
transfer of assets; and, in the case of the new or successor
employer of the affected Participants, its resolutions shall
include an assumption of liabilities with respect to such
Participant's inclusion in the new employer's plan, and

          (c)  Such other plan and trust are qualified under
sections 401(a) and 501(a) of the Code.

          13.7 Indemnification:  Unless the Board of Directors of
the Company shall determine otherwise, the company shall
indemnify, to the full extent permitted by law, any employee
acting in good faith within the scope of his employment in
carrying out the administration of the Plan.

          13.8 Action by the Company:  Any action by the Company,
including any amendment authorized to be made under Article XI,
shall be made by a resolution adopted by the Company's Board of
Directors.  In addition, any person or persons authorized by the
Board may take action on behalf of the Company.  Any such
resolution of the Board of Directors shall be effective provided
it is adopted in accordance with the bylaws (or other governing
authority) of the Company.  Any action taken by any other person
or persons shall be effective provided it is executed in
accordance with the authorization of the Board.

 XIII-5

          13.9 Applicable Law:  The provisions of the Plan shall
be construed and administered according to, and its validity and
enforceability shall be determined under, ERISA.  In the event
ERISA does not preempt state law in a particular circumstance,
the laws of the State of New York shall govern.

          13.10     Interpreting the Plan:  This Plan shall be
interpreted in accordance with the rules of this section and
Section 2.2.

               (a)  Compounds of the Word "Here":  The words
"hereof", "hereunder" and other similar compounds of the word
"here" shall mean and refer to the entire Plan, not to any
particular provision or section.

               (b)  Examples:  Whenever an example is provided or
the text uses the term "including" followed by a specific item or
items, or there is a passage having similar effect, such passages
of the Plan shall be construed as if the phrase "without
limitation" followed such example or term (or otherwise applied
to such passage in a manner that avoids limits on its breadth of
application).

               (c)  Fiduciary Discretion:  With respect to the
powers, duties and responsibilities allocated to the named
Fiduciaries under the Plan, the Plan Administrator and the
Trustee shall have full discretionary authority to implement and
perform such powers, duties and responsibilities.  Specific
references in the Plan to the Plan Administrator's or the
Trustee's discretion in a particular context shall create no
inference that the Plan Administrator's or Trustee's discretion
in any other respect, or in connection with any other provisions,
is less complete or broad.

               (d)  Invalid Provisions:  If any provision of this
Plan is, or is hereafter declared to be void, voidable, invalid
or otherwise unlawful, the remainder of the Plan shall not be
affected thereby.

 XIV-1


                           ARTICLE XIV

                   Top-Heavy Plan Provisions

          14.1  Application:  In the event that the Plan is
determined to be a Top-Heavy Plan (as hereinafter defined), this
Article XIV shall become effective as of the first day of the
Plan Year in which the Plan is a Top-Heavy Plan.

          14.2  Definitions:

          (a)  Key Employee:  During any year that the Plan is a
Top-Heavy Plan, an Employee (including any Beneficiary of an
Employee) is a Key Employee if, at any time during the Plan Year
or any of the 4 preceding Plan Years, he is (or was):

          (1)  An officer of the Employer whose Annual
Compensation (as hereinafter defined) exceeds 50 percent of the
dollar limitation in effect for such year under Code section
415(b)(1)(A);

          (2)  One of the 10 employees having Annual Compensation
of more than the dollar limitation in effect for such year under
Code section 415(c)(1)(A), having individual ownership interests
in the Employer of more than 1/2 of 1 percent, and owning the
largest interests in the Employer;

          (3)  A 1 percent owner of the Employer having Annual
Compensation from the Employer of more than $150,000; or

          (4)  A 5 percent owner of the Employer.
Ownership shall be determined according to Code section
416(i)(1)(B).  For purposes of paragraph (1) above, no more than
50 Employees (or if less, the greater of 3 or 10 percent of the
Employees) shall be treated as officers.  For purposes of
paragraph (2) above, if 2 Employees have the same ownership
interest, the Employee with the higher Annual Compensation shall
be treated as having the larger interest.  For purposes of
Paragraph (1), (2) and (3), annual compensation means
compensation as defined in Code section 415(c)(3), but including
amounts contributed by the Employer pursuant 

 XIV-2

to a salary reduction agreement which are excludable from the employee's
gross income under Code section 125 or 402(a)(8).

          (b)  Minimum Contribution - For a Plan Year, the lesser
of 3 percent of a Participant's Annual Compensation or, if this
Plan does not enable a defined benefit in the Required
Aggregation Group (as determined below) to satisfy the
requirements of Code section 401(a)(4) or 410, a percentage of a
Participant's Annual Compensation equal to the percentage at
which contributions are made (or required to be made) under the
Plan and all other plans in the Required Aggregation Group (as
defined below) for the Key Employee for whom such percentage is
highest.

          (c)  Top-Heavy Plan:  For any Plan Year beginning after
December 31, 1983, a plan that is required in such year to
satisfy the requirements of Code section 416 because the
aggregate of the account balances of all Key Employees in the
Plan exceeds 60 percent of the aggregate of the account balances
of all Participants in the Plan, such determination to be made in
accordance with the procedures described in Code section 416(g)
and the regulations thereunder as of the last day of the
preceding Plan Year (or in the case of the first Plan Year, as of
the last day of such Plan Year) (the "determination date").  For
purposes of determining whether the Plan is a Top-Heavy Plan, the
Plan must be aggregated with all other plans maintained by the
Employer which are required to be aggregated with the Plan in
order for the Plan to meet the requirements of Code sections
401(a)(4) or 410, and all other plans maintained by the Employer
in which a Key Employee is a Participant (the "Required
Aggregation Group").  In addition, the Plan may also be
aggregated with any other plans maintained by the Employer so
long as such aggregation would not prevent the aggregated group
from satisfying the requirements of Code sections 401(a)(4) or
410 (the "Permissive Aggregation Group").

          14.3  Allocation of Minimum Contribution:  For any year
in which the Plan is a Top-Heavy Plan, the Minimum Contribution
as defined in Section 14.2(c) hereof shall be made to the account
of each Participant who is a non-Key Employee, unless the Minimum


 XIV-3

Contribution for the Participant is made under another defined
contribution plan maintained by the Employer.  Such Minimum
Contribution shall be made to the Employer Contribution Account
of each non-Key Employee Participant who is employed on the last
day of such Plan Year without regard to such Participant's Hours
of Service during such Plan Year.  The Employer and the Plan
Administrator shall determine under which plan a Participant
shall receive the Minimum Contribution if the Employee is a
Participant in more than one plan maintained by the Employer.

 XV-1

                         ARTICLE XV

                          Signature

          The above amended and restated Plan is hereby adopted
and approved, to be effective as of July 1, 1992 (except as
otherwise indicated), this 29th day of June, 1994.


                              PEPSICO, INC.



                              By: /s/ J. ROGER KING
                                  --------------------------------
                                       J. Roger King
                                       Senior Vice President,
                                       Personnel


Approved:

/s/ ALAN ROCKOFF
_____________________
Law Department

  
/s/ SYLVESTER HOLMES
________________________
Tax Department


 APPENDIX

                              APPENDIX

The following Appendix Articles modify particular terms of the
Plan as it applies to certain Employee groups.  Except as
specifically modified in this Appendix, the foregoing provisions
of the Plan shall fully apply.  In the event of a conflict
between this Appendix and the foregoing provisions of the Plan,
the Appendix shall govern with respect to the conflict.

 A-1


                             Article A
                           KFC - Collins

          The terms of this Article apply to certain Plan
Participants who were employees of Collins Foods International,
Inc. and who were Participants in the Collins Food International,
Inc. Employee Savings Plan on March 17, 1991.  The effective date
of this amendment is March 17, 1991, the date Collins Foods
International, Inc. was merged into Kentucky Fried Chicken
Corporation.  As of the merger, Participants were entitled to
make investment directions into the Kentucky Fried Chicken
Corporation Long Term Savings Program.  If no investment election
was received, the Participant's account was transferred to the
Security Plus Fund.  The Kentucky Fried Chicken Corporation Long
Term Savings Program was merged into the PepsiCo Long Term
Savings Program effective December 31, 1991.

          A.1  Definitions:  The following words and phrases as
used herein, have the respective meanings set forth in this
Article, unless the context clearly indicates to the contrary.

               (a)  Collins:  Collins Food International, Inc.

               (b)  Savings Plan:  Collins Food International, Inc.
                    Employee Savings Plan.

               (c)  Closing Date:  March 17, 1991

               (d)  Account Balance:   The amount in the account of
                    each Participant in the Savings Plan as of the 
                    Closing Date.

               (e)  Voluntary Contribution:   The amount voluntarily
                    contributed to the Savings Plan by a Participant prior
                    to January 1, 1987.

               (f)  Voluntary Contribution Account   The account of a
                    Participant to which his Voluntary Contributions and 
                    the gains and losses thereon are credited.

 A-2

          A.2  Participants Covered by this Appendix:  As of the
Closing Date, Employees of Collins who participated in the
Savings Plan became Participants in the Kentucky Fried Chicken
Corporation Long Term Savings Program if the Participant had an
Account Balance in the Savings Plan as of the Closing Date.  In
addition, individuals described in the preceding sentence became
Participants in this Plan as of December 31, 1991 if they had an
account balance in the Kentucky Fried Chicken Corporation Long
Term Savings Program as of December 31, 1991.  Each Participant
in the Savings Plan as of the Closing Date became fully vested in
his Account Balance.

          A.3  Voluntary Contributions:  A Participant may make
withdrawals from his Voluntary Contribution Account from time to
time, subject to reasonable procedures as the Plan Administrator
may establish.  Withdrawals of Voluntary Contributions shall
consist only of the principal amount credited to the
Participant's Voluntary Contribution Account.

          A.4  Plan Loans:  Effective as of the Closing Date, no
new plan loans shall be available under the Kentucky Fried
Chicken Corporation Long Term Savings Program and this Plan and
no existing loans may be renewed or extended.  Plan loans that
were made under the Savings Plan, and are outstanding as of the
Closing Date, are expressly authorized as a permissible
investment under the Kentucky Fried Chicken Corporation Long Term
Savings Program and this Plan in accordance with (and subject to)
the following provisions of this section.

          (a)  The program of Plan loans authorized by this
section shall be administered by the Plan Administrator (or its
delegate).

          (b)  Plan loans shall bear a reasonable rate of
interest, the amount to be determined from time to time in
accordance with the rules and procedures in effect under the
Savings Plan on the Closing Date.  The term of any loan shall be
that in effect for the loan on the Closing Date.

          (c)  A loan shall continue to be repaid in the manner
in effect on the Closing Date, provided that interest and
principal on the loan must be repaid through payroll deduction
installments (not less frequently than quarterly) over a total
period not 

 A-3

to exceed 4-1/2 years (including renewals and extensions).  Loan 
repayments shall be invested in accordance with the Participant's 
current investment direction for Salary Deferral Contributions.  
If no such election is in effect, repayments shall be invested in the 
manner specified by the Plan Administrator from time to time.

          (d)  A loan shall be documented by such notes,
evidences of indebtedness, security agreements and other
instruments executed by the Participant as the Plan Administrator
may require.

          (e)  A loan shall constitute an investment of only
amounts credited to the Account of the borrowing Participant.
All gains and losses on a loan shall be credited to the borrowing
Participant's Account.

          (f)  A loan shall be adequately secured at all times.
All loans are secured by a portion of a borrowing Participant's
Account (but not more than the lesser of: (1) 50 percent of the
Account, or (2) the amount of the loan).  To the extent the
principal amount of the loan (immediately after its origination,
extension or renewal) does not exceed 50 percent of the
Participant's Account at such time, the loan will be deemed to be
adequately secured.  Any additional loan amount must at all times
be secured by other security of a type and value that would be
accepted by commercial lenders for such purpose.

          (g)  A loan shall be in default if the Participant
fails to make any payment when due or if there occurs such other
circumstances as may be prescribed by the Plan
Administrator.  If a loan is in default, execution on the
defaulting Participant's Account shall be accomplished when and
to the extent the Account is distributed to the Participant
hereunder.  Execution on any other security of the Participant
shall be accomplished at the time deemed necessary by the Plan
Administrator to prevent a loss to the Plan.

          (h)  If a Participant has a Termination of Employment
or dies, any loan outstanding to the Participant shall become
immediately due.  If the portion of a Participant's Account
securing his loan otherwise becomes payable to the Participant
hereunder, such loan shall become due to the extent this portion
of the Account is to be 

 A-4

distributed.  In either case, the amount of the loan that is due 
shall be satisfied by applying against it the portion of the Participant's 
Account that secures the loan. In turn, such Account shall be 
correspondingly reduced prior to making the distribution to or on behalf 
of the Participant.

  B-1

                         ARTICLE B
                     KFC Hourly Employees

The terms of this Article apply to any Employee who is employed
on or after December 1, 1989 on an hourly basis by KFC
Corporation; KFC Enterprises, Inc.; KFC National Management
Company; Kentucky Fried Chicken International Holdings, Inc.;
Kentucky Fried Chicken Corporate Holdings, Ltd or the Company
(only with respect to those Employees of the Company who are (i)
providing services in Illinois to Kentucky Fried Chicken
Corporation and (ii) working under the supervision of Kentucky
Fried Chicken Corporation) (collectively referred to as "KFC").

          B.1  Modifications to Section 3.1:  For purposes of
determining the eligibility to participate in the Plan of an
Employee who is covered by this Article, the introductory
language of Section 3.1 (the portion preceding subsection (a))
shall read as follows:

          "3.1  Eligibility:  Any full-time hourly Employee of
KFC whose Employment Commencement Date is before January 1, 1992
shall be eligible to participate in the Plan once he has enrolled
in his Employer's One Plus program.  Any full-time hourly
Employee of KFC who is coded as a shift-supervisor and whose
Employment Commencement Date is on or after January 1, 1992,
shall be eligible to participate in the Plan after the attainment
of age 21 and the completion of one Year of Service.  The
following Employees or classes of Employees shall not be eligible
to participate in this Plan:"

          B.2  Modifications to Section 4.1(d):  For purposes of
determining the deferral amount in the case of an Active
Participant who is covered by this Article, subsections (a), (d)
and (e) of Section 4.1 shall read as follows:

          "(a)  Deferral Amount:  Subject to the limitations
established by this Article IV, each active Participant may defer
in any Plan Year up to $60 of his Eligible Pay per pay period, in
accordance with such rules and regulations as may be established
by the Plan Administrator.  In the event that a Participant
elects to defer a portion of his Eligible Pay
under the Plan, it will be designated for contribution by the
Employer to the 

 B-2

Trust on behalf of the Participant, and for
deposit in his Salary Deferral Account.  All amounts deposited to
a Participant's Salary Deferral Account shall at all times be
fully vested."

          "(d)  Election Procedures:  An election made pursuant
to subsection (b) or (c) above shall be in the manner specified
by the Plan Administrator.  Any election shall specify the amount
of the deferral desired as a whole dollar amount, subject to the
limitation in subsection (a) above.  The Plan Administrator, in
its discretion, may give no effect to an election that does not
meet minimum standards for completeness and accuracy as the Plan
Administrator may establish."

          "(e)  Payroll Deductions:  A Participant's Salary
Deferral Contributions shall be withheld from his Eligible Pay
through automatic payroll deductions.  Salary Deferral
Contributions may not be withheld after they have been actually
or constructively received by the Participant."

 C-1

                              ARTICLE C
                      Pizza Hut Hourly Employees
                                
                                
          The terms of this Article apply to any Employee who is
employed on an hourly basis by the Southern, Western, or Florida
divisions of Pizza Hut of America or its domestic locations and
subsidiaries (collectively referred to as "Pizza Hut").

          B.1.  Modifications to Section 3.1.  For purposes of
determining the eligibility to participate in the Plan of an
Employee who is covered by this Article, the introductory
language of Section 3.1 (the portion preceding subsection (a))
shall read as follows:

               "3.1  Eligibility:  Effective, January 1, 1993,
any hourly Employee of Pizza Hut shall be eligible to participate
in the Plan once he becomes a participant in the Pizza Hut Hourly
Employees Retirement Plan, i.e., attains age 21 and completes
1,000 hours of service.  The following Employees or classes of
Employees shall not be eligible to participate in this Plan:"

 D-1

                              ARTICLE D
                  Prior Definitions of Eligible Pay
                                
          The terms of this article apply to prior definitions of
Eligible Pay.

Effective January 1, 1989, excepted where otherwise noted,
Eligible Pay was defined as follows:

          2.1(k)  Eligible Pay.  For each Plan Year, a
Participant's Eligible Pay shall be determined as follows:

                    (1)  With respect to all Employees other than
those employed by Frito-Lay, Inc. or its subsidiaries:

                         (i)  In the case of salaried Employees
who are considered exempt from the minimum wage and overtime pay
provisions of the Fair Labor Standards Act:

                                (I)  for such Employees who were
Employees on or before July 15 of the preceding Plan Year, or
such other date during the preceding Plan Year as the Plan
Administrator may select (July 15 or such other date being
hereinafter referred to as the "Salary Determination Date" with
respect to all Employees other than those employed by Frito-Lay,
Inc. or its subsidiaries), Annual Compensation shall be the
Participant's annual base salary in effect on the Salary
Determination Date plus any lump sum amount received by the
Participant prior to the Salary Determination Date and during
such preceding Plan Year under the PepsiCo Executive Incentive
Plan or Pepsico's or a subsidiary's Middle Management Incentive
Plan; or

                              (II)  for such Employees who were
not Employees on or before the Salary Determination Date, Annual
Compensation shall be the Participant's annual base salary on his
date of hire;

                         (ii)  In the case of any salaried
Employees who are not considered exempt from the minimum wage and
overtime pay provisions 

 D-2

of the Fair Labor Standards Act, and in the case of eligible hourly 
Employees:

                              (I)  for such Employees who were
Employees on or before the Salary Determination Date, Eligible
Pay shall be the Participant's base salary or hourly wage rate on
the Salary Determination Date, plus any overtime pay earned by
the Participant prior to the Salary Determination Date during
such preceding Plan Year, annualized in accordance with rules
adopted by the Plan Administrator;

                              (II)  for such Employees who were
not Employees on or before the Salary Determination Date, Annual
Compensation shall be the Participant's annual base salary or
hourly wage rate on his date of hire, annualized in accordance
with rules adopted by the Plan Administrator;

                         (iii)  In the case of Employees whose
remuneration is based, in whole or in part, on sales-related
commission payments:

                              (I)  for such Employees who were
Employees on or before the salary Determination Date, Eligible
Pay shall be the Participant's base annual salary in effect on
the Salary Determination Date, plus any commissions earned by the
Participant prior to the Salary Determination Date during such
preceding Plan Year, annualized in accordance with rules adopted
by the Plan Administrator;

                              (II)  for such Employees who were
not Employees on or before the Salary Determination Date,
Eligible Pay shall be the Participant's annual base salary on his
date of hire.

                    (2)  With respect to Employees employed by
Frito-Lay, Inc. or its subsidiaries:

 D-3


                         (i)  In the case of salaried Employees
who are considered exempt from the minimum wage and overtime pay
provisions of the Fair Labor Standards Act:

                              (I)  for such Employees who were
Employees on or before July 13 of the preceding Plan Year, or
such other date during the preceding Plan Year as the Plan
Administrator may select (July 13 or such other date being
hereafter referred to as the "Salary Determination Date" with
respect to Employees employed by Frito-Lay, Inc. or its
subsidiaries), Eligible Pay shall be the Participant's annual
base salary in effect on the Salary Determination Date plus any
lump sum amount under the PepsiCo Executive Incentive Plan
received by the Participant prior to the Salary Determination
Date and during such preceding Plan Year, or any quarterly Frito-
Lay Management Incentive Plan payments received by the
Participant prior to the Salary Determination Date and during
such preceding Plan Year annualized; or

                              (II)  for such Employees who were
not Employees on or before the Salary Determination Date,
Eligible Pay shall be the Participant's annual base salary on his
date of hire;

                         (ii)  In the case of any salaried
Employees who are not considered exempt from the minimum wage and
overtime pay provisions of the Fair Labor Standards Act, and in
the case of eligible hourly Employees:

                              (I)  for such Employees who were
Employees on or before the Salary Determination Date, Eligible
Pay shall be the Participant's W-2 earnings plus any amounts
designated as "Choice Pay" or "Flexible Pay" under an Employer's
Benefits Plus program that are used to pay for benefits or are
contributed under the Plan 

 D-4

(such amounts being hereafter referred to as "Flexible Pay") prior to 
the Salary Determination Date during such preceding Plan Year, annualized 
in accordance with rules adopted by the Plan Administrator or, if greater, 
the Participant's W-2 earnings plus Flexible Pay during the calendar
year prior to such preceding Plan Year; or

                              (II)  for such Employees who were
not Employees on or before the Salary Determination Date, Annual
compensation shall be the Participant's annual base salary on his
date of hire, annualized in accordance with rules adopted by the
Plan Administrator;

                         (iii)  In the case of a Participant who
is classified as  commissioned ("route sales") Employees:

                                (I)  for such Employees who were
Employees on or before the Salary Determination Date, Eligible Pay
shall be the Participant's W-2 earnings, plus Flexible Pay prior
to the Salary Determination Date during such preceding Plan Year,
annualized in accordance with rules adopted by the Plan Administrator or,
if greater, the Participant's W-2 earnings plus Flexible Pay during 
the Calendar Year prior to such preceding Plan Year, or

                                   (II) for such Employees who
were not Employees on or before the Salary Determination Date, 
Eligible Pay shall be the Participant's monthly guaranty on his 
date of hire, annualized.

                (3) With respect to Employees employed by Wilson
Sporting Goods, Co. or its subsidiaries:

                        (i)  In the case of salaried Employees who
are considered exempt from the minimum wage and overtime pay pro-
visions of the Fair Labor Standards Act:

 D-5  

                            (I)  for such Employees who were 
Employees on or before the Salary Detrmination Date, Eligible Pay
shall be the Participant's annual base salary in effect on the 
Salary Determination Date plus any lump sum amount received
by the Participant prior to the Salary Determination Date and during
such preceding Plan Year under the PepsiCo Executive Incentive Plan
or PepsiCo's or a subsidiary's Middle Management Incentive Plan; or

                              (II)  for such Employees who were not 
Employees on or before the Salary Determination Date, Eligible Pay shall 
be the Participant's annual base salary on his date of hire;

                        (ii)  In the case of any salaried Employees who
are not considered exempt from the minimum wage and overtime pay
provisions of the Fair Labor Standards Act, and in the case of eligible
commissioned Employees:
                              
                              (I) for such Employees who were Employees
on or before the Salary Determination Date, Eligible Pay shall be the
Participant's W-2 earnings plus Flexible Pay prior to the Salary 
Determination Date during such preceding Plan Year, annualized
in accordance with rules adopted in the Plan Administrator; or

                             (II)  for such Employees who were not
Employees on or before the Salary Determination Date, Eligible Pay shall 
be the Participant's annual base salary on his date of hire;
                        
                        (iii)  In the case of eligible hourly Employees:

                                (I)  for such Employees who were
Employees on or before the Salary Determination Date, Eligible Pay
shall be the Participant's base salary or hourly wage rate on the 
Salary Determination Date, plus any overtime pay earned by the

 D- 6

Participant prior to the Salary Determination Date during such preceding 
Plan Year, annualized in accordance with rules adopted by the Plan Admin-
istrator; or

                                (II)  for such Empolyees who were not 
Employees on or before the Salary Determination Date, Eligible Pay
shall be the Participant's hourly wage rate on his date of hire, 
annualized in accordance with rules adopted by the Plan Administrator;

                        (iv)  In the case of Employees who are classified
as piecework-paid Employees:

                                (I)  for such Employees who were Employees
on or before the Salary Determination Date, Eligible Pay shall be 
Participant's average hourly rate of pay during the first six months of 
the preceding Plan Year, plus any overtime pay earned by the Participant 
prior to the Salary Determination Date during said preceding Plan Year, 
annualized in accordance with rules adopted by the Plan Administrator; or

                                (II)  for such Employees who were not
Employees on or before the Salary Determination Date, Eligible Pay shall
be the greater of the Participant's labor guarantee on his date of hire or
his piecework guarantee on his date of hire, annualized in accordance with
rules adopted by the Plan Administrator.

                (4)  Effective as of January 1, 1985, in the case of an
Employee that is transferred from one Employer to another after the Salary
Determination Date for any year, such Employee's Eligible Pay for the year
shall be the Employee's annual base salary, annualized hourly wage rate,
annualized weekly guarantee, annualized labor guarantee or annualized 
piecework guarantee (whichever is applicable based on the Employee's
classification) as of the transfer date, plus certain additional
compensation received by the Employee prior to the

 D-7

Salary Determination Date but in the same Plan Year as such date.  The
additional compensation included pursuant to the preceding sentence is
any overtime, commissions or unit pay (annualized), any lump sum paid
under the PepsiCo Executive Incentive Plan or PepsiCo's or a subsidiary's 
Middle Management Incentive Plan, and any quarterly payments under a Frito-
Lay Management Incentive Plan (annualized).

                (5)  For purposes of paragraphs (1), (2), (3), and (4) above
and except for amounts designated as "Choice Pay" under an Employer's 
Benefits Plus program that are used to buy benefits and amounts contributed
under the Plan, salary or wages shall not include amounts or the value of 
benefits received, or deemed received, under any performance share plan, 
stock option plan or similar plan or under any pension or welfare benefit
plan maintened by the Employer, whether such plan is qualified or non-
qualified and whether such amounts are deferred or not deferred.

                (6)  In the case of Employees who are not covered by the
provisions of paragraphs (1), (2), (3), or (4) above, the Plan 
Administrator shall establish a method for determining Eligible Pay based
upon the method of compensation of such Employees and such method shall
be applied in a nondiscriminatory manner for such group of Employees.

                (7)  No more than $200,000 in Eligible Pay shall be taken
into account under the Plan in any Plan Year on or after the Effective 
Date.  This $200,000 limit shall be adjusted automatically a the time and 
in such manner as permitted under Code section 415(d).

Effective January 1, 1992, Eligible Pay was defined as follows:
        
        (k) Eligible Pay:  Effective January 1, 1992, for each Plan Year, 
a Participant's Eligible Pay shall be determined as follows:

                (1) Participants Other Than Those Employed by Restaurants
or Frito Division:  With respect to all Participants other than those 
employed by a

 D-8
restaurant division or by Frito-Lay, Inc., Frito-Lay of Texas, Inc., 
Recot, Inc., or Smartfoods, Inc. (a "Frito division"), a Participant's
Eligible Pay shall be the sum of:

                (i)  The Participant's salary or wages, including forms of 
pay delivered in alternative manners such as piecework and payment by
mileage for drivers, overtime, shift differentials, commissions, bonuses
received under the PepsiCo Executive Incentive Plan or the Company's or
a subsidiary's Middle Management Incentive Plan, and payment by mileage
for drivers, overtime, shift differentials, commissions, bonuses received
under the PepsiCo Executive Incentive Plan or the Company's or a subsid-
iary's Middle Management Incentive Plan, and

                (ii)  Any amount not included in (i) above which is
contributed by the Employer on behalf of the Participant pursuant to 
a salary reduction agreement and which is not includable in gross income 
under Code sections 125, 402(a)(8), or 402(h).

The amounts under subparagraphs (i) and (ii) shall be taken from payroll
records for the full calendar year that precedes the Plan Year by 2 years.
For example, for the 1993 Plan Year, "Eligible Pay" shall be determined 
from amounts earned for the full calendar year ending December 31, 1990.
For a Participant who has only a partial year's earnings during the full 
calendar year 2 years prior to the Plan Year, the partial year's
earnings shall be annualized.  For a Participant with no earnings
during the full calendar year 2 years prior to the Plan Year, Eligible
Pay shall equal the Participant's base salary or wages, not including 
alternative forms of base pay, overtime, shift differentials, commissions
or bonuses on the later of: (A) the "Eligible Pay determination date"
designated by the Plan Administrator with respect to Employees other than
those employed by a restaurant division or a Frito division, or (B) the 
Participant's Employment Commencement Date.

 D-9

   (2)  Participants Employed by Frito Division:  With
respect to a Participant employed by a Frito division, Eligible Pay
shall be determined as follows:

       (i)  in the case of a Participant who is a salaried Employee 
considered exempt from the minimum wage and overtime pay
provisions of the Fair Labor Standards Act, Eligible Pay shall mean:

        (A)  If the Participant was an Employee on the Eligible Pay 
Determination Date designated by the Plan Administrator
with respect to Employees employed by the Frito division,

            (I) the Participant's annual base salary in effect on the 
Eligible Pay determination date in the preceding Plan Year, plus

            (II)  any trimester Frito-Lay Management Incentive Plan
payments received by the Participant prior to the Eligible Pay determination
date and during such preceding Plan Year.

        (B)  If the Participant was not an Employee on the Eligible Pay
determination date in the preceding Plan Year, the Participant's annual
base salary on his Employment Commencement Date.

        (ii)  In the case of a Participant who is a salaried Employee not
considered exempt from the minimum wage and overtime pay provisions of the
Fair Labor Standards Act, and in the case of a Participant who is an hourly
Employee, Eligible Pay shall mean:

 D-10

        (A)  If the Participant was an Employee on or before the Eligible
Pay determination date in the preceding Plan Year, the greater of:

                (I)  the Participant's W-2 earnings, plus any amounts
designated as "Flexible Pay" and contributed by salary reduction agreement
to the Employer's Benefits Plus program or this Plan, in each case through
the Eligible Pay determination date during such preceding Plan Year, 
annualized in accordance with rules adopted by the Plan Administrator, or

                (II)  the Participant's W-2 earnings plus Flexible Pay 
during the calendar year immediately prior to such preceding Plan Year.

        (B)  If the Participant was not an Employee on or before the Eligible 
Pay determination date, the Participant's annual base salary or hourly
wage rate on his Employment Commencement Date, annualized in accordance 
with rules adopted by the Plan Administrator.

(iii)  In the case of a Participant who is classified as a commissioned
("route sales") Employee, Eligible Pay shall mean:

        (A)  If the Participant was an Employee on or before the
Eligible Pay determination date, the greater of:

                (I)  the Participant's W-2 earnings, plus any amounts
of Flexible Pay through the Eligible Pay determination date during the 
preceding Plan Year, annualized in accordance with rules adopted by the Plan
Administrator, or

 D-11

                (II)  the Participant's W-2 earnings plus Flexible Pay 
during the calendar year immediately prior to such preceding Plan Year.

        (B)  If the Participant was not an Employee on or before the 
Eligible Pay determination date for the preceding Plan Year, the
Participant's weekly guarantee on his Employment Commencement Date,
annualized in accordance with rules adopted by the Plan Administrator.

(3)  Participants Employed by Restaurant Division:  With respect to a
Participant employed by a restaurant division of the Company, his
Eligible Pay shall be determined as follows:

        (i)  In the case of a Participant who is a salaried Employee of
a restaurant division, Eligible Pay shall mean:

                (A)  If the Participant was an Employee on the Eligible
Pay determination date designated by the Plan Administrator with respect
to the Employees of his Employer, the sum of:

                        (I)  the Participant's annual base salary in effect
on the Eligible Pay determination date,

                        (II)  any target or lump sum bonus for the calendar
year, annualized in accordance with rules adopted by the Plan Adminstrator.

                (B)  If the Participant was not an Employee on the Eligible
Pay determination date with respect to the Employees of his Employer, the
sum of the amounts under (I) and (II) above but

 D-12

determined as of the Participant's Employment Commencement Date.

        (ii)  In the case of a Participant who is an hourly Employee of
the KFC division, Eligible Pay shall mean:

                (A)  If the Participant was an Employee on the Eligible 
Pay determination date designated by the Plan Administrator with respect
to KFC division Employees, the sum of:

                        (I)  the Participant's annualized hourly wage rate
rate in effect on the Eligible Pay determination date, plus

                        (II) any overtime pair prior to the Eligibility
Pay determination date but within the same calendar year, annualized in
accordance with rules adopted by the Plan Administrator.

                (B)  If the Participant was not an Employee on the Eligible
Pay determination date with respect to KFC division Employees, the sum
of the amounts under (I) and (II) above but determined as of the 
Participant's Employement Commencement Date.

(4)  Special Rules for Determining Eligible Pay:

        (i)  For purposes of paragraphs (1) through (3) above and
except for salary reduction amounts designated as Flexible Pay under an
Employer's Benefits Plus program that are used to buy benefits and amounts
contributed under the Plan, salary or wages shall not include amounts or 
value of benefits received, or deemed received, under any performance share
plan, stock option plan or similar plan or under any pension or welfare
benefit plan maintained by the Employer, whether such

 D-13

plan is qualified or non-qualified and whether such amounts are deferred or
not deferred.

        (ii)  In the case of Employees who transfer from one Employer to
another during the year, Eligible Pay of such Employees shall be the 
amount of annualized base salary or hourly wage rate on the transfer date
plus annualized overtime, commission pay received prior to the transfer date
and prior to the determination date and the amount of any lump sum bonus
paid from an Employer's Incentive Compensation program.

        (iii)  Notwithstanding the foregoing provisions of this subsection,
in the case of an Employee who elects to make nonqualified deferrals under 
the PepsiCo Executive Income Deferral Program for an upcoming Plan Year,
the Employee's Eligible Pay for such Plan Year shall not
be greater than his current base pay and the prior year's bonus under
the Employer's incentive compensation program, decreased by any non-
qualified deferrals elected for the upcoming Plan Year, and increased
by amounts that will be received as distributions from the PepsiCo 
Executive Income Deferral Program for such Plan Year.

        (iv)  For any Plan Year beginning on or after January 1, 1989, the
Eligible Pay of each Participant taken into account under the Plan shall
not be less than $10,000 and shall not exceed $200,000, the latter as 
adjusted by the Secretary of the Treasury.  In determining the Eligible
Pay of a Participant for purposes of the $200,000 limitation set forth
in the preceding sentence, the rules of section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants of 
the Participant who have not attained age 19 before the close of the 
Plan Year.  If, as a result of the application of such rules, the adjusted
$200,000

 D-14

limitation is exceeded, then the limitation shall be prorated amoung the
affected individuals in proportion to each such individual's Eligible
Pay as determined under this Section prior to the application of this
limitation.

References in the Plan to deferrals of Eligible Pay, or Salary Deferral
Contributions from Eligible Pay, shall be read as referring to deferrals
of a Participant's current Employee compensation not in excess of Eligible
Pay, determined as above.


 1-1


                                SCHEDULE 1

                                PEPSICO
                       LONG TERM SAVINGS PROGRAM

Designated Employers for Nonrestaurant Salaried Employees
                           (As of 7/1/92)

          Amarillo Pepsi-Cola, Inc.
          Atlantic Soft Drink Company, Inc.
          Atlantic Soft Drink Company of Knoxville
          Belfast Bottling Co. of Reno
          Beverage Products Corporation
          Beverages, Foods & Service Industries, Inc.
          Brainerd-Wadena Beverage Company
          Central Valley Beverage Company, Inc.
          Claremont Pepsi-Cola Bottling Co., Inc.
          Dr Pepper Bottling Co., of San Francisco
          East Kentucky Beverage Company, Inc.
          Elko Bottling Co.
          Frito-Lay, Inc.
          Frito-Lay, Texas, Inc.
          General Cinema Beverages, Inc.
          General Cinema Beverages of Akron, Inc.
          General Cinema Beverages of California, Inc.
          General Cinema Beverage of Dayton, Inc.
          General Cinema Beverages of Ft. Myers, Inc.
          General Cinema Beverages of Georgia, Inc.
          General Cinema Beverages of Indiana, Inc.
          General Cinema Beverages of Miami, Inc.
          General Cinema Beverages of North Carolina, Inc.
          General Cinema Beverages of North Florida, Inc.
          General Cinema Beverages of Ohio, Inc.
          General Cinema Beverages of Springfield, Inc.
          General Cinema Beverages of Virginia, Inc.
          General Cinema Beverages of Washington, D.C., Inc.
          General Cinema Beverages of West Virginia, Inc.
          General Cinema Beverages of Youngstown, Inc.
          Haffenreffer Beverage, Inc.
          Iron Range Bottling Co., Inc.
          Jackson David Bottling Co.
          Laurel Group, Limited
          Lovers Leap Company
          Mesa Beverage Company
          National Beverages, Inc.
          New Century Beverage Company
          Pepsi-Cola Alton Bottling Inc.


 1-2
          Pepsi-Cola Bottling Company of Dodge City, Inc.
          Pepsi-Cola Bottling Company of Grand Island
          Pepsi-Cola Bottling Company of Los Angeles
          Pepsi-Cola Bottling Company of Lyons, Inc.
          Pepsi-Cola Bottling Company of Minneapolis &
            St. Paul
          Pepsi-Cola Bottling Company of Oklahoma City, Inc.
          Pepsi-Cola Bottling Company of Omaha, Inc.
          Pepsi-Cola Bottling Company of Reading
          Pepsi-Cola Bottling Company of Salt Lake City, Inc.
          Pepsi-Cola Bottling Company of St. Louis, Inc.
          Pepsi-Cola Bottling Company of St. Mary's Inc.
          Pepsi-Cola Bottling Company of Tampa
          Pepsi-Cola Bottling Company of Waterloo, Iowa
          Pepsi-Cola Bottling Company of Wichita, Inc.
          Pepsi-Cola Metropolitan Bottling Company, Inc.
            (only at certain locations as designated
            by the Plan Administrator)
          Pepsi-Cola Personnel, Inc. (only at certain
            locations as designated by the Plan Administrator)
          Pepsi-Cola San Joaquin Bottling Company
          Pepsi-Cola Sweeteners, Inc.
          Recot, Inc.
          Rice Bottling Enterprises, Inc.
          Smartfoods, Inc.
          Southwest Beverage Corporation
          Supreme Beverages, Inc.
          Waycross Pepsi-Cola Bottling Company


 2-1

                          SCHEDULE 2

                             PEPSICO
                    LONG TERM SAVINGS PROGRAM
 Designated Employers for Nonrestaurant Hourly and Commissioned Employees
 
                         (As of 7/1/92)


          Amarillo Pepsi-Cola, Inc.
          Atlantic Soft Drink Company, Inc.
          Atlantic Soft Drink Company of Knoxville
          Belfast Bottling Co. of Reno
          Beverage Products Corporation
          Beverages, Foods & Service Industries, Inc.
          Brainerd-Wadena Beverage Company
          Central Valley Beverage Company, Inc.
          Claremont Pepsi-Cola Bottling Co., Inc.
          Dr Pepper Bottling Co., of San Francisco
          East Kentucky Beverage Company, Inc.
          Elko Bottling Co.
          Frito-Lay, Inc.
          Frito-Lay, Texas, Inc.
          General Cinema Beverages, Inc.
          General Cinema Beverages of Akron, Inc.
          General Cinema Beverages of California, Inc.
          General Cinema Beverage of Dayton, Inc.
          General Cinema Beverages of Ft. Myers, Inc.
          General Cinema Beverages of Georgia, Inc.
          General Cinema Beverages of Indiana, Inc.
          General Cinema Beverages of Miami, Inc.
          General Cinema Beverages of North Carolina, Inc.
          General Cinema Beverages of North Florida, Inc.
          General Cinema Beverages of Ohio, Inc.
          General Cinema Beverages of Springfield, Inc.
          General Cinema Beverages of Virginia, Inc.
          General Cinema Beverages of Washington, D.C., Inc.
          General Cinema Beverages of West Virginia, Inc.
          General Cinema Beverages of Youngstown, Inc.
          Haffenreffer Beverage, Inc.
          Iron Range Bottling Co., Inc.
          Jackson David Bottling Co.
          Laurel Group, Limited
          Lovers Leap Company
          Mesa Beverage Company
          National Beverages, Inc.
          New Century Beverage Company


 2-2
          
          Pepsi-Cola Alton Bottling Inc.
          Pepsi-Cola Bottling Company of Dodge City, Inc.
          Pepsi-Cola Bottling Company of Grand Island
          Pepsi-Cola Bottling Company of Los Angeles
          Pepsi-Cola Bottling Company of Lyons, Inc.
          Pepsi-Cola Bottling Company of Minneapolis & St. Paul
          Pepsi-Cola Bottling Company of Omaha, Inc.
          Pepsi-Cola Bottling Company of Petersburg, Inc.
          Pepsi-Cola Bottling Company of Reading
          Pepsi-Cola Bottling Company of Salt Lake City, Inc.
          Pepsi-Cola Bottling Company of St. Louis, Inc.
          Pepsi-Cola Bottling Company of Tampa
          Pepsi-Cola Bottling Company of Waterloo, Iowa
          Pepsi-Cola Bottling Company of Wichita, Inc.
          Pepsi-Cola Metropolitan Bottling Company, Inc.
            (only at certain locations as designated
            by the Plan Administrator)
          Pepsi-Cola Personnel, Inc. (only at certain
            locations as designated by the Plan Administrator)
          Pepsi-Cola San Joaquin Bottling Company
          Pepsi-Cola Sweeteners, Inc.
          Recot, Inc.
          Rice Bottling Enterprises, Inc.
          Smartfoods, Inc.
          Supreme Beverages, Inc.
          Waycross Pepsi-Cola Bottling Company

 3-1

                       SCHEDULE 3

                         PEPSICO
                LONG TERM SAVINGS PROGRAM

          Designated Employers for Restaurant Employees
                     (As of 7/1/92)


Pizza Hut, Inc. (and its domestic locations and subsidiaries
  except for locations formerly owned by the Herb Blankenship
  Franchise; Middleton Enterprises, Inc. and its subsidiaries;
  and Employees who work for Pizza Hut of Cincinnati)
PepsiCo Food Systems, a division of PepsiCo, Inc.
Kentucky Fried Chicken Corporation
KFC Corporation
KFC Enterprises, Inc.
KFC National Management Company
KFC of California
Kentucky Fried Chicken International Management Company
Kentucky Fried Chicken International Holdings, Inc.
Kentucky Fried Chicken Corporate Holdings, Ltd.
Taco Bell Corp. (and its domestic subsidiaries)
Taco Bell Enterprises, Inc.
PepsiCo, Inc. (only with respect to those Employees of PepsiCo,
    Inc. who are (i) providing services in Illinois to another
    Employer and (ii) working under the supervision of such other
    Employer)

 4-1

                           SCHEDULE 4

                            PEPSICO
                   LONG TERM SAVINGS PROGRAM

       Designated Employers for Transportation Employees
                        (As of 7/1/92)

          Frito-Lay, Inc.
          Frito-Lay of Texas, Inc.
          Smartfoods, Inc.
          Recot, Inc.


 5-1

                           SCHEDULE 5

                            PEPSICO
                    LONG TERM SAVINGS PROGRAM

            Designated Hourly Employees of the Company
                          (As of 7/1/92)

Employees represented by Local 30 of the International Union
  of Operating Engineers/A.F.L.-C.I.O.
Security Guards based in Purchase, New York


EXHIBIT 10(g)

                               
                            AMENDMENT
                               TO
                 PEPSICO LONG TERM SAVINGS PLAN



          The PepsiCo Long Term Savings Plan is amended as
follows:

          (a)  As of January 1, 1993 (the "Transfer Date"), the
assets and liabilities of the PepsiCo Employee Stock Ownership
Plan ("ESOP") attributable to the Employer Contribution Accounts
(including the Regular Accounts and the Tax Credit Accounts) of
(i) all Participants in the ESOP who are in the classes of
employees eligible to participate (even if they are not then
participating) in this Plan on the Transfer Date, and (ii) all
former Participants (and their Beneficiaries) in the ESOP who
cannot be located and whose accounts are subject to forfeiture
under the provisions of the ESOP on the Transfer Date, shall be
transferred to this Plan.  The Plan shall establish Accounts (or
add amounts to Participants' existing Plan Accounts) for such
Participants equal to the fair market value of their Employer
Contribution Accounts under the ESOP immediately prior to the
Transfer Date.  The Accounts established (or added to) for the
Participants shall be administered and managed in accordance with
the provisions of the Plan (including the investment and
distribution of such amounts), subject to any restrictions
mandated by law that continue to apply to amounts previously held
in a Participant's Employer Contribution Account under the ESOP.
The Plan  Administrator may establish such subaccounts as it
deems necessary for recordkeeping purposes to reflect the
transfer of assets and liabilities to the Plan.
     (b)  The amounts transferred to the Plan pursuant to
subparagraph (a) above shall initially be invested (or held for
investment) in the PepsiCo Capital Stock Fund, and thereafter,
shall be subject to investment direction in the same manner as
other amounts held in the Plan.
     (c)  Of a Participant in the ESOP who has an amount
transferred to the Plan is also a Participant in this Plan, his
Beneficiary of his Account (including the amount transferred
pursuant to subparagraph (a)) shall be determined pursuant to
Article VII of the Plan.  For other Participants and former
Participants in the ESOP who have amounts transferred to the
Plan, their Beneficiary shall be determined pursuant to Section
5.15 of the ESOP (which is incorporated herein by reference),
until such time as the Participant is eligible to and executes a
Designation of Beneficiary form under the Plan.
     (d)  The transfer of assets and liabilities provided for in
this Amendment shall be made in a manner that does not violate
sections 401(a) or 414(1) of the Code or Section 208 of ERISA.
The Plan Administrator and the Trustee shall take such actions
and execute such other documents as may be necessary or desirable
to effectuate fully the transfer provided for herein.
     (e)  The transfer of assets and liabilities provided for in
the Amendment shall be subject to the Internal Revenue Service's
not taking any adverse action regarding the validity of the
transfer or the tax-qualified status of the Plan or the ESOP with
respect to the transfer, and, if the Internal Revenue Service
takes such adverse action and the deficiencies may not be
corrected to the satisfaction of the Company, then regardless of
the provisions contained herein, this Amendment shall become null
and void ab initio and the transferred amounts shall be returned
to the ESOP.

                  PEPSICO LONG TERM SAVINGS PROGRAM
                        AMENDMENT APPROVAL

     Effective as of January 1, 1993, the PepsiCo Long Term
Savings Program is hereby amended in accordance with the
Amendment attached hereto.
     
This 14th day of September, 1994.

                              PEPSICO, INC.
                              By:  /s/ J. ROGER KING
                              J. Roger King

APPROVED:

By: /s/ ALAN ROCKOFF
Law Department

By:  /s/ Sylvester Holmes
Tax Department

                               
EXHIBIT 11

 1 OF 2

                 PEPSICO, INC. AND SUBSIDIARIES
 Computation of Net Income Per Share of Capital Stock - Primary
Years Ended December 31, 1994, December 25, 1993 and December 26, 1992
             (in millions except per share amounts)

                                                 1994      1993      1992
Shares outstanding at beginning
  of year                                       798.8     798.8     789.1

Weighted average of shares issued
  during the year for exercise of
  stock options, acquisitions,
  conversion of debentures and
  payment of compensation awards                  2.9       5.0       4.2

Shares repurchased (weighted)                    (8.2)     (7.5)     (0.8)

Dilutive shares contingently issuable
  upon exercise of stock options,
  conversion of debentures and payment
  of compensation awards, net of
  shares assumed to have been purchased for
  treasury (at the average price) with
  assumed proceeds from exercise of
  stock options and compensation
  awards                                         10.1      13.8      14.2
Total shares - primary                          803.6     810.1     806.7

Income before cumulative effect of
 accounting changes                          $1,784.0  $1,587.9  $1,301.7

Decrease in interest and amortiza-
  tion of debt expense relating
  to convertible debentures, net
  of income tax benefit                             -       0.1       0.1

Income before cumulative effect of
 accounting changes as adjusted               1,784.0   1,588.0   1,301.8

  Cumulative effect of accounting
   changes:
    Postemployment benefits                     (55.3)        -         -
    Pension assets                               23.3         -         -
    Postretirement benefits
     other than pensions                            -         -    (356.7)
    Income taxes                                    -         -    (570.7)
Net income as adjusted                       $1,752.0  $1,588.0  $  374.4

Income (charge) per share:
 Before cumulative effect of
  accounting changes                         $   2.22  $   1.96  $   1.61
   Cumulative effect of
    accounting changes:
     Postemployment benefits                    (0.07)        -         -
     Pension assets                              0.03         -         -
     Postretirement benefits
      other than pensions                           -         -     (0.44)
     Income taxes                                   -         -     (0.71)
Net income per share - primary               $   2.18  $   1.96  $   0.46


 2 OF 2

                 PEPSICO, INC. AND SUBSIDIARIES
  Computation of Net Income Per Share of Capital Stock - Fully Diluted
Years Ended December 31, 1994, December 25, 1993 and December 26, 1992
             (in millions except per share amounts)

                                                 1994      1993      1992
Shares outstanding at beginning
  of year                                       798.8     798.8     789.1

Weighted average of shares issued
  during the year for exercise of
  stock options, acquisitions,
  conversion of debentures and
  payment of compensation awards                  6.0      12.3      10.7

Shares repurchased (weighted)                    (8.2)     (7.5)     (0.8)

Dilutive shares contingently issuable
  upon exercise of stock options,
  conversion of debentures and payment
  of compensation awards, net of
  shares assumed to have been purchased for
  treasury (at the higher of average or
  quarter-end price) with assumed
  proceeds from exercise of stock
  options and compensation awards                 9.5      13.9      14.2
Total shares - fully diluted                    806.1     817.5     813.2

Income before cumulative effect of
 accounting changes                          $1,784.0  $1,587.9  $1,301.7

Decrease in interest and amortiza-
  tion of debt expense relating
  to convertible debentures, net
  of income tax benefit                             -       0.1       0.1

Income before cumulative effect of
 accounting changes as adjusted               1,784.0   1,588.0   1,301.8

  Cumulative effect accounting
   changes:
    Postemployment benefits                     (55.3)        -         -
    Pension assets                               23.3         -         -
    Postretirement benefits
     other than pensions                            -         -    (356.7)
    Income taxes                                    -         -    (570.7)
Net income as adjusted                       $1,752.0  $1,588.0  $  374.4

Income (charge) per share:
 Before cumulative effect of
  accounting changes                         $   2.21  $   1.94  $   1.60
   Cumulative effect of accounting
    changes:
     Postemployment benefits                    (0.07)        -         -
     Pension assets                              0.03         -         -
     Postretirement benefits
      other than pensions                           -         -     (0.44)
     Income taxes                                   -         -     (0.70)
Net income per share -
 fully diluted                               $   2.17  $   1.94  $   0.46


                                  
EXHIBIT 12

                      PEPSICO, INC. AND SUBSIDIARIES
                                     
             COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
   Years Ended December 31, 1994, December 25, 1993, December 26, 1992,
                  December 28, 1991 and December 29, 1990
                    (in millions except ratio amounts)

                               1994      1993      1992    1991      1990

Earnings:

Income from continuing
 operations before income
  taxes and cumulative
   effect of accounting
    changes (a)            $2,664.4  $2,422.5  $1,898.8 $1,659.7  $1,653.8

Amortization of
 capitalized interest           5.2       5.0       5.0      4.5       5.3

Interest expense (a)          645.0     572.7     586.1    613.7     686.0

Amortization of
 debt discount                  0.3       0.2       0.3      0.3       0.3

Interest portion of net
 rent expense (b)             150.0     134.4     121.4    103.4      87.4

Earnings available for
 fixed charges             $3,464.9  $3,134.8  $2,611.6 $2,381.6  $2,432.8


Fixed Charges:

Interest expense (a)       $  645.0  $  572.7  $  586.1 $  613.7  $  686.0

Capitalized interest            4.7       6.5       6.6     10.0       8.6

Amortization of
 debt discount                  0.3       0.2       0.3      0.3       0.3

Interest portion of net
 rent expense (b)             150.0     134.4     121.4    103.4      87.4

   Total fixed charges     $  800.0  $  713.8  $  714.4 $  727.4  $  782.3

Ratio of Earnings
 to Fixed Charges              4.33      4.39      3.66     3.27      3.11

(a)  To  improve  comparability,  the  1991  and  1990 amounts  have  
     been  restated to report   under   the   equity   method    of
     accounting   the  results  of  previously  consolidated   snack   food
     businesses  in  Spain, Portugal and Greece, which were contributed  to
     the  new Snack Ventures Europe joint venture with General Mills,  Inc.
     in late 1992.
(b)  One-third  of  net rent expense  is  the  portion deemed representative 
     of the interest factor.


                                                              


     EXHIBIT 21
                                     
                   ACTIVE SUBSIDIARIES OF PEPSICO, INC.
                                     
                             DECEMBER 31, 1994
     
                                                               State or
                                                              Country of
     Subsidiary                                             Incorporation
     
     A & M Food Services, Inc.                              Nevada
       El KrAm, Inc.                                        Iowa
       Pizza Huts of the Northwest, Inc.                    Minnesota
     Ainwick Corporation                                    Oregon
     Anderson Hill Insurance Limited                        Bermuda
     Atlantic Soft Drink Company, Inc.                      South Carolina
       Atlantic Soft Drink Company of Knoxville             Tennessee
       Waycross Pepsi-Cola Bottling Co., Inc.               Georgia
     Beaman Bottling Company                                Tennessee
     Beverages, Foods & Service Industries, Inc.            Delaware
     Chevys, Inc.                                           California
       Chevys, Inc.                                         Delaware
       Chevys Inc., Las Vegas                               Nevada
     CPK Acquisition Corp.                                  California
       California Pizza Kitchen, Inc.                       California
         California Pizza Kitchen of Delaware, Inc.         Delaware
         California Pizza Kitchen of Illinois               Illinois
         California Pizza Kitchen of Scottsdale, Inc.       Arizona
         California Pizza Kitchen of Tyson's Corner         Virginia
     Davlyn Realty Corporation                              Delaware
     East Kentucky Beverage Company, Inc.                   Kentucky
     Equity Beverage, Inc.                                  Delaware
     Hostess-FL NRO Ltd.                                    Canada
     Hot 'n Now, Inc.                                       Michigan
       Burger One Inc.                                      Michigan
       HNN, Inc.                                            Delaware
     Japan Frito-Lay Ltd.                                   Japan
     Kentucky Fried Chicken of California, Inc.             Delaware
       Kentucky Fried Chicken of Southern California, Inc.  California
     National Beverages, Inc.                               Florida
     North Pacific Territories Holding Company              Washington
       Alpac Corporation                                    Washington
         Gamble, Inc.                                       Oregon
         MBA Western Co.                                    Delaware
           Western Bottling Company, Inc.                   Washington
             Mann Bottling Company, Inc.                    Idaho
             Pepsi Cola Bottling Company of
              Everett, Inc.                                 Washington
         Pepsi-Cola Bottling Company of Alaska, Inc.        Alaska
     PepsiCo Capital Corporation N.V.                       Neth. Antilles
       Kentucky Fried Chicken Corporate Holdings, Ltd.      Delaware
         Kentucky Fried Chicken International               
           Holdings, Inc.                                   Delaware
           PepsiCo Puerto Rico, Inc.                        Delaware
             PRS, Inc.                                      Delaware
               PEI N.V.                                     Neth. Antilles
           Seven-Up Nederland B.V.                          Netherlands
             PepsiCo IVI S.A.                               Greece
             Pepsi-Cola International (PVT) Limited         Pakistan
             Pepsi-Cola Mamulleri Limited Sirketi           Turkey
               Pizza Gida Isletmeleri                       Turkey
             KFC Canada (NRO) Ltd.                          Canada
       PepsiCo Finance (Antilles A) N.V.                    Neth. Antilles
         Pepsi-Cola Canada (NRO) Ltd.                       Canada
           Pepsi-Cola Canada, Ltd.                          Canada
       PepsiCo Finance (Antilles B) N.V.                    Neth. Antilles
         Pepsi-Cola France SNC                              France
         Pepsi-Cola G.m.b.H.                                Germany
           Florida Int'l. Fruchtsaftgetraenke G.m.b.H.      Germany
           Pizza Hut Restauration G.m.b.H. & Co. K.G.       Germany
       Pepsi-Cola Argentina, S.A.C.I.                       Argentina
         Inversiones PFI Chile Limitada                     Chile
           Evercrisp Snack Products de Chile S.A.           Chile
       Pepsi Snacks Argentina S.A.                          Argentina
     PepsiCo China, Ltd.                                    China
     PepsiCo Holdings Ltd.                                  England
       Kentucky Fried Chicken (Great Britain) Limited       England
       PepsiCo International Ltd.                           England
       PepsiCo Property Management Limited                  England
       PepsiCo World Trading Company (UK) Ltd.              England
       Pizza Hut International (England) Ltd.               England
       Pizza Hut (UK) Ltd.                                  England
       Smiths Crisps Limited                                England
       Walkers Smiths Snack Foods Limited                   England
         Crispflow Limited                                  England
         Frito-Lay Holdings Limited                         England
         PFI Agriculture Europe Ltd.                        England
     PepsiCo Overseas Corp.                                 Delaware
     PepsiCo Overseas Finance N.V.                          Neth. Antilles
     PepsiCo Services Corp.                                 Delaware
     PepsiCo World Trading Company, Inc.                    Delaware
     Pepsi-Cola (Bermuda) Limited                           Bermuda
       The Concentrate Manufacturing Company of Ireland     Ireland
          Seven-Up Ireland Limited                          Ireland
          Pepsi-Cola Manufacturing (Ireland)                Ireland
            PARCO N.V.                                      Neth. Antilles
              Paine Corporation N.V.                        Neth. Antilles
                Paige N.V.                                  Neth. Antilles
                  PepsiCo Finance (U.K.) Limited            England
                    Pizza Belgium S.A.                      Belgium
                    E Wedel S.A.                            Poland
                  PepsiCo (Ireland) Limited                 Ireland
     Pepsi-Cola Bottling Company of Los Angeles             California
       Channel Island Beverage Co., Inc.                    California
     Pepsi-Cola Commodities, Inc.                           Delaware
     Pepsi-Cola de Espana, S.A.                             Spain
       Compania de Bebides PepsiCo, S.A.                    Spain
       Kas S.A.                                             Spain
       Pizza Hut de Espana S.A.                             Spain
       Snack Vendures Europe S.C.A.                         Europe
     Pepsi-Cola de France S.A.R.L.                          France
     Pepsi-Cola Equipment Corp.                             New York
     Pepsi-Cola Far East Trade Development Co., Inc.
     Philippines
     Pepsi-Cola Interamericana de Guatemala S.A.            Guatemala
     Pepsi-Cola International Limited                       Bermuda
     Pepsi-Cola International Limited (U.S.A.)              Delaware
     Pepsi-Cola Metropolitan Bottling Company, Inc.         New Jersey
       General Cinema Beverages, Inc.                       Delaware
       Laurel Group Limited                                 Pennsylvania
       New Century Beverage Company                         California
         Belfast Bottling Co. of Reno                       Nevada
       Pepsi-Cola Alton Bottling, Inc.                      Illinois
       Pepsi-Cola Mediterranean, Ltd.                       Delaware
         Seven-Up International, Inc.                       Delaware
           Seven-Up Southern Hemisphere, Inc.               Missouri
     Pepsi-Cola Mexicana S.A. de C.V.                       Mexico
     Pepsi-Cola Panamericana, S.A.                          Delaware
     Pepsi-Cola Personnel, Inc.                             Delaware
     Pepsi Cola San Joaquin Bottling Company                Delaware
     Pizza Hut, Inc.                                        Delaware
       PepsiCo Australia Pty., Ltd.                         Australia
         Pizza Hut Properties Pty. Ltd.                     Australia
       Pizza Hut of America, Inc.                           Delaware
         Bell Taco Funding Syndicate                        Australia
         PGCC, Inc.                                         Delaware
           General Cinema Beverages of Akron, Inc.          Delaware
           General Cinema Beverages of Dayton, Inc.         Delaware
           General Cinema Beverages of Ohio, Inc.           Delaware
           General Cinema Beverages of
            Springfield, Inc.                               Delaware
           General Cinema Beverages of
            Youngstown, Inc.                                Delaware
     Pizza Management, Inc.                                 Texas
       Pizza Management de Espana, S.A.                     Spain
       Restaurant Associates, S.A.                          Spain
     Recot, Inc.                                            Delaware
       Frito-Lay, Inc.                                      Delaware
         FL Holding, Inc.                                   Delaware
           Opco Holding Inc.                                Delaware
             Pepsi-Cola Operating Company of Chesapeake
              and Indianapolis                              Delaware
         TGCC, Inc.                                         Delaware
           General Cinema Beverages of
            Ft. Myers, Inc.                                 Delaware
           General Cinema Beverages of Georgia, Inc.        Delaware
           General Cinema Beverages of Indiana, Inc.        Delaware
           General Cinema Beverages of Miami, Inc.          Delaware
           General Cinema Beverages of
            North Florida, Inc.                             Delaware
           General Cinema Beverages of Virginia, Inc.       Delaware
           General Cinema Beverages of
            Washington, D.C., Inc.                          Delaware
           General Cinema Beverages of
            West Virginia, Inc.                             Delaware
         Midland Bottling Co.                               Delaware
           MBA Brainerd Co.                                 Delaware
             Brainerd-Wadena Beverage Company               Minnesota
           MBA Dodge City Co.                               Delaware
             Pepsi-Cola Bottling Company of
              Dodge City, Inc.                              Minnesota
           MBA Elko Co.                                     Delaware
             Elko Bottling Co.                              Nevada
           MBA Grand Island Co.                             Delaware
             Pepsi-Cola Bottling Company of
               Grand Island                                 Nebraska
           MBA Grand Rapids Co.                             Delaware
             Iron Range Bottling Co., Inc.                  Minnesota
           MBA Jackson Co.                                  Delaware
             Jackson David Bottling Co.                     Colorado
           MBA Lyons Co.                                    Delaware
             Pepsi-Cola Bottling Company of
              Lyons, Inc.                                   Minnesota
           MBA Mesa Co.                                     Delaware
             Mesa Beverage Company                          Colorado
           MBA Omaha Co.                                    Delaware
             Pepsi-Cola Bottling Company of
              Omaha, Inc.                                   Nebraska
           MBA Recyclers Co.                                Delaware
             Contract Recyclers, Inc.                       Minnesota
           MBA Salt Lake Co.                                Delaware
             Pepsi-Cola Bottling Company of
              Salt Lake City, Inc.                          Minnesota
           MBA St. Louis Co.                                Delaware
             Pepsi-Cola Bottling Company of
              St. Louis, Inc.                               Missouri
               Edmund Industrial Redevelopment
                Corporation                                 Missouri
           MBA St. Paul Co.                                 Delaware
             Pepsi-Cola Bottling Company of
              Minneapolis and St. Paul                      Minnesota
               Contract Beverages, Inc.                     Minnesota
           MBA Tulsa Beverage Co.                           Delaware
             Beverage Products Corporation                  Oklahoma
           MBA Wichita Co.                                  Delaware
             Pepsi-Cola Bottling Company of
              Wichita, Inc.                                 Minnesota
         Pepsi-Cola Bottling Company of Tampa               Florida
         NKFC, Inc.                                         Delaware
           QSR, Inc.                                        Delaware
             KFC Enterprises, Inc.                          Delaware
               Kentucky Fried Chicken Corporation           Delaware
                 KFC Corporation                            Delaware
                   General Cinema Beverages of
                    California, Inc.                        Delaware
                   General Cinema Beverages of
                    North Carolina, Inc.                    Delaware
                   KFC National Management Company          Delaware
         Smartfoods, Inc.                                   Delaware
     Redux Realty, Inc.                                     Delaware
     Rice Bottling Enterprises, Inc.                        Tennessee
     Sabritas, S.A. de C.V.                                 Mexico
       Empresas Gamesa, S.A. de C.V.                        Mexico
         Groupo Gamesa, S.A. de C.V.                        Mexico
     Shelbyville Bottling Company, Inc.                     Tennessee
     Taco Bell Corp.                                        California
       Calny, Inc.                                          Delaware
       Taco Bell of California, Inc.                        California
       Taco Bell Royalty Company                            California
         Taco Del Sur, Inc.                                 Georgia
         Tenga Taco, Inc.                                   Florida
       Taco Enterprises, Inc.                               Michigan
       TBLD Corp.                                           California
     TFL Holdings, Inc.                                     Delaware
     Upper Midwest Pizza Hut, Inc.                          Delaware
     Von Karman Leasing Corp.                               Delaware
     Wilson International Sales Corporation                 Delaware
     
     
     
     
     
     Omitted  from  the  above list are approximately 340 insignificant  or
     inactive  subsidiaries  which, if considered in  the  aggregate  as  a
     single subsidiary, would not constitute a significant subsidiary.  The
     list  also excludes approximately 100 subsidiaries of Pizza Hut, Inc.,
     of  which  80  operate restaurants in the U.S., and  approximately  40
     subsidiaries of Kentucky Fried Chicken Corporation and Kentucky  Fried
     Chicken Corporate Holdings, Ltd., which operate restaurants outside of
     the U.S.
     
     


Report and Consent of Independent Auditors             EXHIBIT 23

The Board of Directors
PepsiCo, Inc.

The  audits  referred  to in our report dated  February  7,  1995
included  the related financial statement schedule as of December
31,  1994 and December 25, 1993, and for each of the years in the
three-year  period  ended  December  31,  1994  listed   in   the
accompanying  index  at  Item 14(a)2.   The  financial  statement
schedule is the responsibility of the Company's management.   Our
responsibility  is  to  express  an  opinion  on  this  financial
statement  schedule based on our audits.  In  our  opinion,  such
financial statement schedule, when considered in relation to  the
basic   consolidated  financial  statements  taken  as  a  whole,
presents  fairly, in all material respects, the  information  set
forth therein.

We  consent  to  the  use  of  our reports  included  herein  (or
incorporated herein by reference) in the Registration  Statements
on  Form  S-8 (No. 33-35602, No. 33-29037, No. 33-42058, No.  33-
51496,  No. 33-54731 and No. 33-66150, pertaining to the  PepsiCo
SharePower  Stock  Option Plan; No. 33-43189, pertaining  to  the
PepsiCo SharePower Stock Option Plan for Opco Employees; No.  33-
22970,  pertaining to the 1988 Director Stock Plan; No. 33-19539,
pertaining  to  the  1979 Incentive Plan and the  1987  Incentive
Plan;  No.  33-54733, pertaining to the 1994 Long-Term  Incentive
Plan; No. 2-65410, pertaining to the 1979 Incentive Plan; No.  2-
82645 and No. 33-51514, pertaining to the PepsiCo, Inc. Long Term
Savings  Program;  No.  2-93163, No. 2-99532  and  No.  33-10488,
pertaining to the Long Term Savings Programs of Taco Bell  Corp.,
Pizza   Hut,   Inc.  and  Kentucky  Fried  Chicken   Corporation,
respectively) and the Registration Statements on Form S-3 (No. 33-
37271,  pertaining to the Pizza Hut Cincinnati,  Inc.  and  Tri-L
Pizza Huts, Inc. acquisitions; No. 33-35601, No. 33-42122, No. 33-
56666  and  No.  33-66146, pertaining to the  PepsiCo  SharePower
Stock  Option  Plan for Employees of Monsieur Henri Wines,  Ltd.;
No.   33-30658  and  No.  33-38014,  pertaining  to  the  PepsiCo
SharePower  Stock Option Plan for Opco Employees;  No.  33-42121,
pertaining to the PepsiCo SharePower Stock Option Plan  for  PCDC
Employees;  No.  33-66144 pertaining to  the  PepsiCo  SharePower
Stock  Option  Plan for Employees of Chevys, Inc.;  No.  33-66148
pertaining  to  the  PepsiCo SharePower  Stock  Option  Plan  for
Employees of Southern Tier Pizza Hut, Inc. and STPH Delco,  Inc.;
No.  33-30372,  pertaining  to  the Pepsi-Cola  Bottling  Company
Annapolis   acquisition;   No.   33-8677,   pertaining   to   the
$500,000,000 Euro-Medium-Term Notes; No. 33-39283, pertaining  to
the  $2,500,000,000 Debt Securities and Warrants;  No.  33-47527,
pertaining to the Semoran Management Corporation acquisition; No.
33-53232,  pertaining to the $32,500,000 Puerto Rico  Industrial,
Medical  and Environmental Pollution Control Facilities Financing
Authority Adjustable Rate Industrial Revenue Bonds; No. 33-57181,
pertaining  to  the $3,322,000,000 Debt Securities and  Warrants;
No.  33-51389,  pertaining to the $2,500,000,000 Debt  Securities
and  Warrants; No. 33-50685, pertaining to the extension  of  the
PepsiCo  SharePower  Stock  Option Plan  to  Employees  of  Snack
Ventures   Europe,   a  joint  venture  between   PepsiCo   Foods
International  and  General  Mills, Inc.)  and  the  Registration
Statements  on  Form S-4 (No. 33-31844, pertaining  to  the  Erin
Investment Corp. acquisition; No. 33-4635, pertaining to the  A&M
Food Services, Inc. acquisition; No. 33-21607, pertaining to  the
Pizza  Hut Titusville, Inc. acquisition; No. 33-37978, pertaining
to  the  domestic  Kentucky Fried Chicken operations  of  Collins
Foods  International, Inc. acquisition; No. 33-47314,  pertaining
to  the  Pizza Management, Inc. acquisition) and in  the  related
Prospectuses.

                              KPMG Peat Marwick LLP
New York, New York
March 28, 1995


EXHIBIT 24

                                
                                

                    POWER OF ATTORNEY


PepsiCo, Inc. ("PepsiCo") and each of the undersigned, an officer
or director, or both, of PepsiCo, do hereby appoint Edward V.
Lahey, Jr. and Lawrence F. Dickie, and each of them severally,
its, his or her true and lawful attorney-in-fact to execute on
behalf of PepsiCo and the undersigned the following documents and
any and all amendments thereto (including post-effective
amendments):

(i)  Registration Statements No. 33-8677, 33-39283, 33-53232, 33-
51389 and 33-57181 relating to the offer and sale of PepsiCo's
Debt Securities and Warrants, and any registration statements
deemed by any such attorney-in-fact to be necessary or
appropriate to register the offer and sale of debt securities or
warrants by PepsiCo or guarantees by PepsiCo of any of its
subsidiaries' debt securities or warrants;

(ii)  Registration Statements No. 33-4635, 33-21607, 33-30372, 33-
31844, 33-37271, 33-37978, 33-47314 and 33-47527 all relating to
the primary and/or secondary offer and sale of PepsiCo Capital
Stock issued or exchanged in connection with acquisition
transactions, and any registration statements deemed by any such
attorney-in-fact to be necessary or appropriate to register the
primary and/or secondary offer and sale of PepsiCo Capital Stock
issued or exchanged in acquisition transactions;

(iii)  Registration Statements No. 33-29037, 33-35602, 33-42058,
33-51496, 33-54731 and 33-66150 relating to the offer and sale of
shares of PepsiCo Capital Stock under the PepsiCo SharePower
Stock Option Plan; Registration Statements No. 33-38014, 33-30658
and 33-43189 relating to the extension of the PepsiCo SharePower
Stock Option Plan to employees of Pepsi-Cola Operating Company of
Chesapeake and Indianapolis; Registration Statements No. 33-
35601, 33-42122, 33-56666 and 33-66146 relating to the extension
of the PepsiCo SharePower Stock Option Plan to employees of
Monsieur Henri;  Registration Statement No. 33-42121 relating to
the extension of the PepsiCo SharePower Stock Option Plan to
employees of Pepsi-Cola of Washington D.C., L.P.; Registration
Statement No. 33-66144 relating to the extension of the PepsiCo
SharePower Stock Option Plan to employees of Chevys, Inc.;
Registration No. 33-66148 relating to the extension of the
PepsiCo SharePower Stock Option Plan to employees of Southern
Tier Pizza Hut, Inc.; Registration Statement No. 33-50685
relating to the extension of the PepsiCo SharePower Stock Option
Plan to employees of Snack Ventures Europe, a joint venture
between PepsiCo Foods International and General Mills, Inc., and
any registration statements deemed by any such attorney-in-fact
to be necessary or appropriate to register the offer and sale of
shares of PepsiCo Capital Stock under the PepsiCo SharePower
Stock Option Plan to employees of PepsiCo or otherwise;

(iv)  Registration Statements No. 2-82645, 2-99532, 2-93163, 33-
10488 and 33-51514 covering the offer and sale of shares of
PepsiCo Capital Stock under the Long Term Savings Programs of
PepsiCo, Pizza Hut, Inc., Taco Bell Corp. and Kentucky Fried
Chicken Corporation, and any registration statements deemed by
any such attorney-in-fact to be necessary or appropriate to
register the offer and sale of shares of PepsiCo Capital Stock
under the long term savings programs of any other subsidiary of
PepsiCo;

(v)  Registration Statement No. 33-54733, relating to the offer
and sale of shares of PepsiCo Capital Stock under PepsiCo's 1994
Long-Term Incentive Plan, Registration Statement No. 33-19539
relating to the offer and sale of shares of PepsiCo Capital Stock
under PepsiCo's 1987 Incentive Plan and resales of such shares by
officers of PepsiCo, and Registration Statement No. 2-65410
relating to the offer and sale of shares of PepsiCo Capital Stock
under PepsiCo's 1979 Incentive Plan, 1972 Performance Share Plan,
as amended, and various option plans, and resales of such shares
by officers of PepsiCo;

(vi)  Registration Statement No. 33-22970 relating to the offer
and sale of shares of PepsiCo Capital Stock under PepsiCo's 1988
Director Stock Plan; and

(vii)  all other applications, reports, registrations,
information, documents and instruments filed or required to be
filed by PepsiCo with the Securities and Exchange Commission, any
stock exchanges or any state official or agency in connection
with the listing, registration or approval of PepsiCo Capital
Stock, PepsiCo debt securities or warrants or PepsiCo guarantees
of its subsidiaries' debt securities or warrants, or the offer
and sale thereof, or in order to meet PepsiCo's reporting
requirements to such entities or persons;

and to file the same, with all exhibits thereto and other
documents in connection therewith, and each of such attorneys
shall have the power to act hereunder with or without the other.

IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 23, 1995.


                                   PepsiCo, Inc.




                              By:  /s/ EDWARD V. LAHEY, JR.
                                   ---------------------------
                                   Edward V. Lahey, Jr.
                                   Senior Vice President, General
                                   Counsel and Secretary




/s/ D.WAYNE CALLOWAY               /s/ ROBERT G. DETTMER
- --------------------------         -----------------------
D. Wayne Calloway                  Robert G. Dettmer
Chairman of the Board, Chief       Executive Vice President and
Executive Officer and Director     Chief Financial Officer
                                   
/s/ ROBERT L. CARLETON             /s/ ROGER A. ENRICO
- -----------------------------      ------------------------
Robert L. Carleton                 Roger A. Enrico
Senior Vice President and          Vice Chairman of the Board,
Controller                         Chairman,
(Chief Accounting Officer)         PepsiCo Worldwide Restaurants
                                   and Director
                                   
/s/ JOHN F. AKERS                  /s/ ROBERT E. ALLEN
- -------------------                ---------------------
John F. Akers                      Robert E. Allen
Director                           Director
                                   
/s/ JOHN J. MURPHY                 /s/ ANDRALL E. PEARSON
- ---------------------              --------------------------
John J. Murphy                     Andrall E. Pearson
Director                           Director
                                   
/s/ SHARON PERCY ROCKEFELLER       /s/ ROGER B. SMITH
- -----------------------------      --------------------------
Sharon Percy Rockefeller           Roger B. Smith
Director                           Director
                                   
/s/ ROBERT H. STEWART, III         /s/ FRANKLIN A. THOMAS
- ---------------------------        ----------------------
Robert H. Stewart, III             Franklin A. Thomas
Director                           Director
                                   
/s/ P.ROY VAGELOS                  /s/ ARNOLD R. WEBER
- ---------------------              -----------------------
P. Roy Vagelos                     Arnold R. Weber
Director                           Director






 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 53 WEEK PERIOD ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000077476 PepsiCo, Inc. 1,000,000 Dec-31-1994 Dec-31-1994 Year 331 1,157 2,202 151 970 5,072 16,130 6,247 24,792 5,270 8,841 14 0 0 6,842 24,792 28,472 28,472 13,715 13,715 0 59 645 2,664 880 1,784 0 0 32 1,752 2.18 2.17